The Basics of Supply and Demand. When I teach principles of economics, I start the class by asking two questions. Do you believe people buy more at lower prices and less at higher prices Do you believe that sellers want to sell more at higher prices and less at lower prices After I get almost universal agreement and I do because I tell them. I tell them  Then you believe. So lets take a quick look the basics and then use it to explain why the current high gas prices are your fault. Believing that people buy less at higher prices and that sellers. If we put this onto a standard graph. Bear with. me. the good stuffs coming. OK. so we now know that demand and supply can be drawn as an X on an L. Just like the picture on the right. After the buyers. This is called the equilibrium the. Q0, P0 on the graph and it means that those willing and able. Just so you know Im not using. Now that the market is stable, we can start to figure out why prices. There are only 4 things that can change a. Demand increases, Demand decreases, Supply increases or Supply. GOVERNMENT+INTERVENTION+%28CON%E2%80%99T%29+MAXIMUM+PRICE%2F+CEILING+PRICE.jpg' alt='Edition Low Microeconomics Price' title='Edition Low Microeconomics Price' />If you understand these 4 cases, you can identify the cause. Increases and decreases in supply and demand are represented by. After the demand or supply changes, buyers and sellers. When everyone is happy. Microsoft Video 1 Compressor there. Again, all of this depends only on you agreeing that. Youll notice that each of the inset pictures has one of the four. Youll also notice that each market change. Demand Increase price increases, quantity increases. Demand Decrease price decreases, quantity decreases. Supply Increase price decreases, quantity increases. Supply Decrease price increases, quantity decreases. So if you observe a price and quantity changing, you know have a powerful tool for understanding the underlying cause. Take the case of high gas prices. College Textbooks. Low prices. Welcome to FirstClassBooks. We are your premier online source for buying and selling college textbooks. Get the best price whether. Term. The discipline was renamed in the late 19th century primarily due to Alfred Marshall from political economy to economics as a shorter term for economic. Test Bank for Microeconomics and Behavior 9th Edition by Frank. Full file at http See More. Market%20Intervention_06.jpg' alt='Edition Low Microeconomics Price' title='Edition Low Microeconomics Price' />From Reuters Millions. Americans will drive their cars to visit family and friends over the. Thanksgiving holiday even though gasoline is above 3. AAA said Thursday. About 3. 8. 7 million Americans, 1. AAA estimated, based on. Web survey of 2,2. The. price per mile of travel is increasing gas prices are increasing and. The only thing. consistent with higher prices and higher quantity is an increase in. If high gas prices were supply driven we would see consumption. And all you have to believe is people buy less at higher.