Write an article based on this "Understand the law of demand. Understand the law of supply. Understand how supply and demand are represented graphically. Understand marginal utility. Understand consumer surplus."
Most people have heard the phrase "supply and demand" used in reference to the mysterious forces governing market economies, but many don't understand these concepts' full implications. "Demand" refers to the desire for a good or service in the marketplace. Generally, if all other factors are equal, demand for a product will fall as its price increases. For example, let's say that a company is about to release a new model of television. The more they charge for this new model, the fewer televisions they can expect to sell overall. This is because consumers have limited amounts of money to spend and, by paying for a more expensive television, they may have to forego spending money on other things which can give them some greater benefit (groceries, gasoline, mortgage, etc.). Conversely, the law of supply dictates that products and services that demand a high price will be supplied at a high rate. Essentially, people who sell things want to make as much revenue as possible by selling lots of expensive products, so, if a certain type of product or service is very lucrative, producers will rush to produce that product or service. For example, let's say that right before Mother's Day, tulips become very expensive. In response to this, the farmers who have the ability to produce tulips will pour resources into this activity, generating as many tulips as possible to take advantage of the high-price situation. One very common way that economists express the relationship between supply and demand is via 2-dimensional x/y graph. Usually, in this case, the x axis is set as Q, the quantity of goods in the marketplace, and the y axis is set as P, the price of the goods. Demand is expressed as a curve sloping from the top left to the bottom right of the graph and supply is expressed as a curve sloping from the bottom left to the top right. The intersection of the supply and demand curves is the point at which the market is at equilibrium—in other words, the point at which producers are producing precisely as many goods and services as consumers demand. Marginal utility is the increase in satisfaction a consumer gets from consuming one additional unit of a good or service. In very general terms, the marginal utility of goods and services is subject to diminishing returns—in other words, each additional unit purchased provides less and less benefit to the consumer. Eventually, the marginal utility of the good or service diminishes to the point that it's not "worth it" for the consumer to purchase an additional unit. For example, let's say that a consumer is very hungry. She goes to a restaurant and orders a hamburger for $5. After this hamburger, she's still a little hungry, so she orders another hamburger for $5. The marginal utility of this second hamburger is slightly less than that of the first since it provides less satisfaction in terms of relief from hunger for its cost than the first hamburger does. The consumer decides not to buy a third hamburger because she's full, and thus, the third hamburger has virtually no marginal utility for her. Consumer surplus is broadly defined as the difference between an item's "total value" or "total value received" to consumers and the actual price that they pay for it. In other words, if consumers pay less for a product than what it's worth to them, consumer surplus represents their “savings”. As a simplified example, let's say that a consumer is in the market for a used car. He has given himself $10,000 to spend. If he buys a car with everything he wants for $6,000, we can say that he has a consumer surplus of $4,000. In other words, the car was worth $10,000 to him, but he ended up with the car and a surplus of $4,000 to spend as he pleases on other things.