Seeds: (S&D) Supply and Demand

(S&D.1) Supply Curves

A supply curve shows the amount of a good producers will sell at any price. It slopes upward because firms usually need a higher price to produce more of a good.
Marginal Cost: the cost of producing the last unit. The cost of producing the last unit rises the more you produce because inputs into the production process grow "tired", meaning they become less productive.
The supply curve is the marginal cost curve. When costs rise the supply curve shifts up (vertically). When costs fall the supply curve shifts down (vertically).
Producer Surplus: Area above supply curve and below the price for all units produced. It represents the profits the industry makes by selling the good, taking into account opportunity costs.

(S&D.2) Demand Curves

A demand curve shows the amount of a good consumers will purchase at any price. It slopes downward because consumers will only buy more of a good if the price is lowered.
Marginal Value: the value of the last unit consumed. Marginal value declines the more you consume because the happiness of each additional unit falls the more you consume.
The demand curve is the marginal value curve. When consumers value something more the demand curve shifts up (vertically). When consumers value something less the demand curve shifts down (vertically).
Consumer Surplus: area above price and below demand curve for all quantities consumed. It represents the value of the goods consumed minus the money paid for all the goods, and is thus a measure of consumer happiness, in dollars.

(S&D.3) Supply and demand together

Figure 1—Supply and Demand Curve Shifts