Home > A1, Learning > Won’t you take me to Appletown?

Won’t you take me to Appletown?

Our interactive studies of supply and demand in Economics have been engaging.  Supply and demand is an interesting concept by itself, but our recent Appletown activity has made it all the more intriguing.


Source: WikiMedia

To begin, a couple key terms must be noted.  Supply is “the amount of goods available,” while demand is “the desire to own something and the ability to pay for it” (Economics: Principles in Action 79, 101).  Another key term used in Appletown is market equilibrium.  Market equilibrium is the point at which “the quantity that people want is equal to the quantity available, and the price stabilizes” (Economics: Principles in Action 148).  It is also important to note that the quantity supplied or demanded will affect the price and quantity produced of a certain good or service.

All of these concepts came into play while participating in Appletown.  The class was divided into two groups of 7- one group the Producers and the other group Consumers.  The Producers drew from an envelope the price at which they were selling their bushel of apples at.  The Consumers drew from a separate envelope the maximum amount of money they could spend on the apples.  Individuals from one group had to bargain with individuals from the other group.  The ending effect was hopefully a deal between the Consumer and the Producer.  The consumers’ goal was to pay less money for the apples than the money they actually had.  The Producers’ goal was to sell the bushel for more than they made them for (the price on their paper).  Some goals were not met because the Consumer and Producer could not strike a deal- no Consumer would pay all of his or her money and no Producer would sell his or her product for less than it was made for.  This is an example of shutting down, which is sometimes the best option.


Source: Stephan Smith FX

From the Appletown activity, I can draw a few conclusions about supply and demand in Microeconomics.  First of all, it is not a good idea for a consumer not to buy a product when the supplier offers a price higher or close to your income.  Secondly, a producer may choose not to sell his or her product when he would be losing profit because the consumer cannot or will not pay the price that is asked.  Lastly, if the number of producers in certain market increased, then there would be an excess supply of that good.  The producers would sell less and, therefore, they would be keeping the price above the market equilibrium.  This can also occur with an increase in consumers.  An increase in consumers would result in an excess demand and the price of the product would be below the market equilibrium.  The Appletown activity is a great way to put the concept of supply and demand in a realistic situation that betters the understanding of a majority of the material we covered in Microeconomics.

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