Demand, Supply, and Market Equilibrium of the textbook explains the Laws of Supply and Demand. Locate a current issue/event that demonstrate these concepts. Write a post explaining why/how the event/issue demonstrates the Laws of Supply and Demand. Be sure to cite your references.

The Laws of Supply and Demand state that if the supply of a good or service is greater than the demand, prices will fall, and if the demand for a good or service is greater than the supply, prices will rise. In a free market the equilibrium is created at the point in which supply and demand equal each other, this ensures there is no surplus or shortage. Going more in-depth, as the price of a (normal) good/service decreases, the quantity demanded and willingness to pay increase. The inverse of this is true as well. In addition as the price of a (normal) good/service increases, the quantity supplied increases; the inverse of this is true as well. This is because suppliers have more of an incentive to produce goods when they are being sold at a higher price.

Because the quantity of electric vehicles is increasing rapidly, the quantity demanded of raw materials to produce lithium batteries is increasing. This has created a shortage of raw materials. With the demand for raw materials exceeding the quantity supplied, the price of raw materials is increasing, causing an increase in the price of electric vehicles. Another thing contributing to the increasing price of electric vehicles is the increase in quantity demanded. One reason for this is that the government is proposing policies requiring the use of electric vehicles for the city and even citizens; for example, a California law mandating that the sale of new vehicles be zero admission that will go into action in 2035.

What do you think of this?