Josie and Jamie headed down the street to the pumpkin patch so they could get their perfect pumpkin for the holidays.

There weren't many pumpkins left because it was toward the end of the pumpkin season and there were many people there trying to get pumpkins. Little did they know this was called a shortage.

Jamie and Josie went up to the man at the register and asked why there weren't many pumpkins left. The man told them, "Our supply, how many pumpkins we have, doesn't meet how many people want pumpkins, which is our demand. "

The man continued to tell them, "Our supply curve, which is what we can price our pumpkins at and how much people will buy for them, has gone up. Because, we have less pumpkins and more people wanting them our prices can go up."

"On the other hand, the demand curve is a picture that shows the shift of peoples want for the pumpkins. When in a graph, where ever the supply curve and demand curve meet is called your equilibrium," he said.

Josie asked, "What happens if you have no more pumpkins for everyone?" The man looked at her and said, "This would mean people would have to find substitutions which means they may have to take a squash and carve it just like a pumpkin. At the moment we are having a supply shock because of how many people are here. This is when our product increases or decreases because of a certian circumstance."

Jamie asked him,"Can you make the prices whatever you want?" He responded, "No we can't because of the price ceiling and price floor."

Josie confused by what was said, asked, "What is are those??"

"Those", the man said, "Are the set prices we have to use. We can't make our prices go to high and be unfair to our costumers so we have a price ceiling. But we also have a price floor to prevent us from dropping our prices too low."

Jamie then asked, "If you have to pay for all the pumpkins before you sell them, how do you pay for the employees?"

The man shed a tear, "Well, there is such a thing called minimum wage. That is the lowest an employer can pay their workers and it is so low we can afford more workers AND lots of pumpkins."