By Derreon gaffeney

Celeste’s
Supply and
Demand.
 Dear readers….

• Dear readers, in today's book I'll be teaching you about an aspect of our economy that is truly
important. Today you will follow Celeste and her sister on a learning experience. The purpose of this
text is to engage our young readers on the importance of supply and demand. As you progress to
higher academic levels, you'll notice that the lessons slowly start to get more and more plain. But
today I've decided to change that. Today's topics will be shown to you through a girl’s day out.
Though we'll still be learning about the great wonders and supply and demand. You'll also be
introduced to other supporting topics of supply and demand. These topics include the determinants of
supply and demand, consumer  surplus, producer surplus, and the concept of ceilings and floors.  I
know it may seem like a lot, but what's better then gaining knowledge and having fun while doing
so? 

• Sincerely,
• derreon s gaffeney

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 • One day Celeste decided to take
her little sister Mary Ann on a
girl’s day out. After a while
they decided that they’d take a
lunch break and then start up
again.

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 • Mary Ann told Celeste that she
wanted to go to Popeyes. So,
they did. But once the got there,
the line was super long. But
they were in no rush, so they sat
in line and waited.

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 • Once it was their time to order
their food there was a sign that
stated “Sorry, we are out of
chicken Sandwiches”. Once
Celeste told Mary Ann the
news, they both were
immediately upset but instead
of letting this ruin their day,
they went to Chick Fil A .

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 • When they got their food at Chick Fil A, they decided to
dine in and eat. While they were eating Celeste noticed Mary
Ann had a confused look on her face. “What’s on your
mind?” Celeste asked. “I just  don’t get it how could they be
out of chicken sandwiches, that’s literally what they're
known for serving!”. Mary Ann exclaimed. “It’s all just a
bad case of supply and demand .“ Celeste remarked.

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 • Mary Ann still had a confused look
on her face. Celest thought of this
as a fun learning opportunity for
her sister. Celeste soon grew a very
noticeable smirk on her face. Mary
Ann immediately knew what was
to come next.

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 • “How about I give you a fun
lesson on supply and
demand?!” Celeste exclaimed.
Mary Ann knew no matter
what she said that Celeste
would do it anyway so she
agreed.

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• So, let’s start you off with the basics Mary Ann. Supply
and Demand. Supply is the different quantities of a good
that sellers are willing and able to sell (produce) at
different prices. In better terms basically the goods that
are available to buy from sellers for different prices.

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 • Let’s say you went to your
favorite boutique. The boutique
had 6 pink corsets in stock
costing $17 each. That is the
boutiques supply of these
specific pink corsets.

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 • Mary Ann started to understand what supply was at this
point and she’s considering buying her a new pink corset.
“Before you feel relieved that’s not all you need to know
about supply, I have to tell you about the determinants”.
Celeste said

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 • “When you hear the word
determinants what’s the root word you
hear?” Celeste asked Mary Ann.
“Determine.” Mary Ann replied.
“Exactly, you’re doing so good!”
Celeste shouted. So, if we’re talking
about the determinants of supply,
we’re talking about what determines
supply.

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 • Supply has 9 determinants which
form an acronym known as
P.E.T.T..P.I.G.S.S

• P- Productivity

• E- Expectations

• T- Taxes

• T- Technology

• P- Prices of other goods

• I- Inputs(cost of)

• G- Government Regulations

• S- Subsidies

• S- Sellers (amount of)

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 At this point Mary Ann started to grasp the concept
of supply. Yet she still was confused as to what this
had to do with popeyes and them not having any
chicken sandwiches. “Well since people were
expecting to have the sandwich today supply
decreased fast”. Celeste told her. Which made a lot
of sense to Mary Ann.

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 • Now it’s time to tell you about
demand. In my (celeste) opinion
demand is easier to understand than
supply. Demand is the different
quantities of goods that consumers are
willing and able to buy at different
prices. TO better explain. It is the
amount of goods or services that
consumers want to and can buy at
different prices.

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 • Let’s say we were out shopping
and you saw the last pink
diamond jacket. But. You noticed
that two other customers have
their eye on the jacket. So you
rush to grab it but it was too late.
“ Oh OK so let me guess all 3 of
us wanting the jacket was the
demand?” Mary Ann answered
“Yes, it was, see you get it
already” Celeste said.

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 • So now it’s time to talk about the determinants of
demand, which is a shorter list than the supply
determinants. The determinants form an acronym
known as N.I.C.E.S.T.

• N-Number of Consumers

• I- Income

• C- Complementary

• E- Expectations

• S- Substitutes

• T- Tastes and Preferences

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 • Now honestly today we experienced
more demand than supply. Such as
substitutes for one. Since popeyes
were out of chicken sandwiches we
came to chick fil a instead. Chick fil A
is a substitute for popeyes. When you
ordered your Chick fil A sandwich
you ordered a drink also, this is
complementary. The drink
complements the food . I believe it’s
more usual to have occurrences with
demand as a consumer. And more
occurrences with supply as a producer.
NOT A FACT JUST AN OPINION.

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• While we’re on the topic let me tell you what a producer is and what a
consumer is.

• A consumer is a person who purchases goods or services for personal

use.

• You may also see or hear someone say user, customer ,buyer , or
purchaser which all mean consumer.

• A producer is a person who makes or grow goods and provide services.

• You may also hear or see someone say maker, supplier, manufacturer, or
provider in this sense all means producer.

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 Producers and consumers also experience Consumer surplus is the difference between Producer Surplus is the difference between
things called “Surplus”. the amount you’re willing to pay for the price and what sellers are willing to sell
something vs the amount you actually pay. something for.

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 “Like house “I know this
ceilings and seems like a lot
floors?” Mary Mary Ann but it’s
Ann questioned. important for you
“Not quite…” to know this”
Celeste chuckled. Celeste said.

Our last topic is

“It’s ok Celeste
ceilings and
I’m intrigued
floors and then
continue” Mary
I’ll give u a little
Ann replied.
easy quiz.

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 • A price ceiling is a maximum legal price.

• So for example you have rent controls.

Which controls landlords from charging you
over a certain amount for rent.

• But in some instances price ceilings may not

always be good.

• Let’s say you loved buying this exclusive

horsetail shampoo. But the price ceiling was
lowered to $5 a bottle. This would be bad
because soon the supply would run out
because the price is so low.

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 • A price floor is a minimum legal price.

• An example of price floors is well most

common minimum wages. Which helps
workers get paid a fair amount for their
work.

• An important rule when talking about

price levels are equilibrium. Price ceilings
can’t be higher than equilibrium and price
floors have to be above equilibrium.

• Price ceilings can’t be higher than

equilibrium because it won’t have any
effect on the market.

• Same for Price floors except for they can’t

be below, or they won’t have any effect.

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• Before we finish, we have one more thing.
This is very important for you to remember!
A change in price of a good does NOT shift
the demand curve.

• “Wow, that was a lot to take in . But, I think

I pretty much understand everything
Celeste.” Mary Ann said

• “Good, I’m happy to be at your service”.

Celeste said

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 • And well readers that was your quick fun lesson on supply and demand I really hope you enjoyed
my lesson and most importantly you learned something new!!

THE END….. for nowwwwwwwww.

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