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    Law of Supply and Demand REVISED

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    Princess Ann Bilog
    This document discusses the laws of supply and demand. It defines demand as the quantity consumers are willing and able to purchase at a given price, and supply as the quantity producers are willing and able to produce and offer for sale. The key determinants of demand and supply are identified. The inverse relationship between price and quantity demanded is shown in a demand schedule table. A change in demand refers to a shift of the entire demand curve, while a change in quantity demanded refers to movement along the existing demand curve caused by a change in price. The concepts of change in supply and change in quantity supplied are also explained and distinguished.

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    Law of Supply and Demand REVISED

    Uploaded by

    Princess Ann Bilog
    14 views13 pages
    This document discusses the laws of supply and demand. It defines demand as the quantity consumers are willing and able to purchase at a given price, and supply as the quantity producers are willing and able to produce and offer for sale. The key determinants of demand and supply are identified. The inverse relationship between price and quantity demanded is shown in a demand schedule table. A change in demand refers to a shift of the entire demand curve, while a change in quantity demanded refers to movement along the existing demand curve caused by a change in price. The concepts of change in supply and change in quantity supplied are also explained and distinguished.

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    Law-of-supply-and-demand-REVISED

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    This document discusses the laws of supply and demand. It defines demand as the quantity consumers are willing and able to purchase at a given price, and supply as the quantity producers are willing and able to produce and offer for sale. The key determinants of demand and supply are identified. The inverse relationship between price and quantity demanded is shown in a demand schedule table. A change in demand refers to a shift of the entire demand curve, while a change in quantity demanded refers to movement along the existing demand curve caused by a change in price. The concepts of change in supply and change in quantity supplied are also explained and distinguished.

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    Download as pptx, pdf, or txt
    14 views13 pages

    Law of Supply and Demand REVISED

    Uploaded by

    Princess Ann Bilog
    This document discusses the laws of supply and demand. It defines demand as the quantity consumers are willing and able to purchase at a given price, and supply as the quantity producers are willing and able to produce and offer for sale. The key determinants of demand and supply are identified. The inverse relationship between price and quantity demanded is shown in a demand schedule table. A change in demand refers to a shift of the entire demand curve, while a change in quantity demanded refers to movement along the existing demand curve caused by a change in price. The concepts of change in supply and change in quantity supplied are also explained and distinguished.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
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    L AW O F S U P P LY A N D
    DEMAND
    L AW O F S U P P L Y A N D D E M A N D
    • The law of supply and demand states that when supply is greater than
    demand prices decreases. When demand is greater than supply, price
    increases. When supply is equal to demand, price remains constant
    DEMAND
    • According to Fajardo (1991), demand is the schedule of various of
    quantities of communities which buyers are willing and able to
    purchase at a given price, time and place. It is the consumer's desire
    and ability to purchase a good or services.
    DETERMINANTS OF DEMAND
    1. Income of the Buyers
    2. Number of Consumers
    3. Taste or Preference
    4. The prices of related goods or services
    5. Consumer expectations.
    E X P L A N A T I O N T O T H E B E H AV I O R O F T H E
    CONSUMERS WHENEVER THERE IS
    INCREASE IN PRICE.
    1.Substitution Effect - it refers to the changes in price motivate by
    consumers to buy relatively cheaper substitutes goods
    2. Income Effect – The changes in price that affects the purchasing
    power of consumers’ income.
    Inverse relationship

    Table 1. Demand schedule


    PRICE QUANTITY DEMANDED
    1 60
    2 50
    3 40
    4 30
    5 20
    6 10
    CHANGES IN QUANTITY DEMANDED VS.
    CHANGE IN DEMAND
    GRAPH 1. CHANGE IN DEMAND

    Change in Demand. A change in demand


    means that the entire demand curve shifts
    either left or right. The initial demand
    curve D0 shifts to become either D1 or
    D2. This could be caused by a shift in
    tastes, changes in population, changes in
    income, prices of substitute or
    complement goods, or changes future
    expectation
    CHANGES IN QUANTITY DEMANDED VS.
    CHANGE IN DEMAND

    GRAPH 2. CHANGE IN QUANTITY DEMAND

    Change in Quantity Demanded. A change in the


    quantity demanded refers to movement along the
    existing demand curve, D0. This is a change in price,
    which is caused by a shift in the supply curve.
    L AW O F D E M A N D
    • As price increases, quantity demanded decreases, and as the price
    decreases, quantity demanded increases. To elucidate if the price
    increase, consumers tend to buy less goods and services. If the price
    decreases, consumers tend to buy more goods and services
    S U P P LY
    • The schedule of various quantities of commodities which producers
    are willing and able to produce and offer at a given price, place and
    time (Fajardo, 1991). It describes the amount of goods and services
    for the consumers.
    D E T E R M I N A N T S O F S U P P LY
    1. Technology
    2. Cost of Production
    3. Price expectation
    4. Price of Related Goods
    5. Taxes and subsidies
    S U P P LY S C H E D U L E
    Table 2. Supply schedule
    PRICE QUANTITY SUPPLIED
    1 10
    2 20
    3 30
    4 40
    5 50
    6 60
    CHANGES IN QUANTITY
    S U P P L I E D V S . C H A N G E I N S U P P LY
    Change in Supply. A change in supply is caused by factors other than the A change in quantity supplied - refers to a change in quantity offered for sale as a
    price of the product. Decrease in supply, shifting the supply curve from S1 result of a change in the price of the product.Suppose the price of a good
    to S1. At the price P1, the quantity supplied will decrease from Q1 to Q2. increases from P1 to P2. The quantity supplied will increase from Q1 to Q2.

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