Demonad for lemonade sure is high and Im starting to run low on lemons!
May I have 2 more to go?
This heat today is crazy!
I might need to increase the price
No problem! That'll be 3 dollars
Ill have a lemonade to go
Yikes! Im running out of lemons! I put in a big order just incase I run out
Since Everyday Lemonade is popular and busy, they have to continue to make lemonade in order to meet the needs of her customers. However, supply of lemons is starting to run low, and since there is high demand, the price must be increased.
I can put the lemonade on sale!
Even though the price increased, it does not affect the demand. It is still hot outside, and people still want lemonade to cool themselves off.
Hey look its only 1 dollar today! Lets get some!
$1 EachToday Only
They order more lemons in order to keep making lemons. They order more than what they initially had just in case they run out again.
Looks like today is going to be another great day!
The next day, they are left with a sirplus of lemons. The day isn't as hot as it was before. If they dont use the lemons and let them go bad, it would be a missuse of supplies and a waste of money.
It doesnt look as busy today... What am I going to do with all these lemons. I cant let them go bad
The advertisement attracts consumers. Since it is cheaper, it gives the customers purchasing power, and will therefore, most likely, get more people to purchase leomade. When the price is lowered, the demand for lemonade will increase .
I have to tell everyone about this. The lemonade is amazing!
More and more come in to purchase lemonade due to the advertisement. The demand curve doesnt shift, but in stead moves along the curve to where the demand is high and the price is low, now that more people will come in since its cheap.