Iligan Medical Center College

San Miguel Village, Pala-o, Iligan City

Basic Education Department
PACUCOA Accredited

GRADE 12
LEARNING PLAN
Applied Economics

Quarter 1 Week 3 Module 3

Market Demand, Market Supply and
Market Equilibrium

KATE D. PAGLINAWAN
ABM TEACHER
INTRODUCTION
Last module, we discussed the issues on the factors of production and how these affect
the economy, the basic problems facing the local and global economics, and the roles of
economics in solving these problems.
Economics helps us solve the problem on excess supply and excess demand, and lead it
to a balanced supply and demand. In our needs, we do not want oversupply. It means wastage of
income. For entrepreneurs, it is not efficient if their stocks or supplies are greater than the actual
demand. It is a loss not revenue.
In economics, there are terms that you must learn to understand the better market
situations. A demand or the amount of good or service consumers are willing to purchase at each
price. If customers cannot pay for it, there is no effective demand. Price is what a buyer pays for
a unit of the specific good or service. The total number of units purchased at that price is called
the quantity demanded.
Before starting the module, I want you to set aside other tasks that may disturb you while
enjoying the lessons. Read the simple instructions below to successfully enjoy the objectives of
this kit. Have fun!
1. Follow carefully all the contents and instructions indicated in every page of this module.
2. Write on your notebook the concepts about the lessons.
3. Writing enhances learning that is important to develop and keep in mind.
4. Perform all the provided activities in the module.
5. Let your facilitator/guardian assess your answers using the answer key card.
6. Analyze conceptually the posttest and apply what you have learned. Enjoy studying!

LESSONS AND COVERAGE

By the end of this lesson, you will be able to:
 Determine the concepts of market demand, market supply and market equilibrium
You will represent real-life situations using the market demand, market supply and market
equilibrium. Specifically, this module will help you to:
1. Determine the concepts of market demand, supply and equilibrium.
2. State the laws of demand and supply.
3. Construct and analyze demand, supply and their curves.
4. Solve problems on demand, supply and equilibrium.

EXPECTED SKILLS
To do well in this module, you need to remember and do the following.
1. Read the instructions carefully before starting anything.
2. Compare all the activities and worksheet. Follow instructions on how to submit them.
3. Look up the meaning of words that you do not know.
4. You will frequently come across process questions as you go through different lessons.
Keep a notebook where you can write your answers to these questions. Use also the
notebook to note down short notes, draw diagrams, and summarize what you have just
read.
5. For worksheets and reports that need to be submitted, use the provided checklist and
rubric to evaluate your work before submission.
6. Allow time for relaxation and recreation when you are mentally tired. Make a time table
to schedule your study and recreation.
PRE-ASSESSMENT
Before you equip yourself with a new set of knowledge, let us check your understanding
about the topic. Enjoy answering!

PART I. GRAPH ANALYSIS

Directions: Please analyze the graph and answer the questions below.
a) Locate the equilibrium point on the demand and supply graph. Put a point on the graph.
b) If the price is above the equilibrium level, what could you predict with the demand and
supply?______________________.
c) If below the equilibrium point what could you predict with the demand and supply?
__________________________ .

PART II. FILL IN THE BLANKS

Directions: Analyze the following statements carefulyy. Fill in the blanks.
1. The law of ______________________________ applies during online sales of shoes; that is
when consumers rush to buy products at 50% discounts.
2. The law of _______________________ applies when the producers supply more pineapple
juices at a higher price; selling at higher quantity at a higher price increases revenue.

EXPLORE
Law of Supply and Demand
The law of supply and demand explains the interaction between the sellers of a product
and the buyers. It shows the relationship between the availability of a particular product and the
desire (or demand) for that product has on its price.
The Law of Demand

The Law of Supply

How Do Supply and Demand Create an Equilibrium Price?

Activity 1.1: “Think, Learn and Challenge Opportunity”
Directions: Let’s analyse this passage. This will help you understand our new topic on demand, supply
and equilibrium. Please read carefully the passage and answer the question below.

1. Under the dowry system in India, a market with more women seeking partners, the trade shift
favors the men. What law or economic principle is applicable?

2. In the same system, men with better jobs receive larger payments. What economic principle is
applicable to this situation? Justify your answer.

3. State the law of demand.

4. State the law of supply.

FIRM UP
Activity 1.2: The Law of Demand and Supply
Directions: Analyse this problem. The following data were taken from an invoice of Company X. The
company imports gasoline from other country.
A.) Plot or graph the data. Interpret the results.
B) Analyze data and describe the curve.

PROBLEM SOLVING

Activity 1.3: BROADENING KNOWLEDGE IN GRAPHS IN ECONOMICS

Directions: Analyze the problem. The following are sets of data taken from the invoice of
Company X. The company imports gasoline from other country.

A.) Plot or graph the data.

B) Analyze data and describe the curve. Interpret the results.

C) Using the data from demand and supply.

DEEPEN
Demand, Supply and Equilibrium
 A demand curve shows the relationship between quantity demanded and price in a given
market on a graph.
 The law of demand states that a higher price typically leads to a lower quantity
demanded.
 A supply curve shows the relationship between quantity supplied and price on a graph.
 The law of supply says that a higher price typically leads to a higher quantity supplied.
 The equilibrium price and equilibrium quantity occur where the supply and demand
curves cross.
 The equilibrium occurs where the quantity demanded is equal to the quantity supplied.
 If the price is below the equilibrium level, then the quantity demanded will exceed the
quantity supplied.
 Excess demand or a shortage will exist. If the price is above the equilibrium level, then
the quantity supplied will exceed the quantity demanded.
Activity 1.4: Let us check your understanding on the topic.
Direction. Fill in the Blanks. Directions: Read the sentences and fill in the blanks.
1. The ______________________________________ explain the interaction between the sellers
of a resource and the buyers for that resource.
2. The __________________________ states that, higher the price, the higher the quantity
supplied.
3. A movement refers to a change along a _________________.
4. A shift in a demand or supply curve occurs when a good's quantity demanded or supplied
changes even though price remains __________________________.
5. When Supply and demand are balanced, it is called ____________________.
6. The _______________________________________states that ―the higher the price, the
lower the quantity demanded.

TRANSFER
Activity 1.5: True or False
Directions: Write TRUE if the statement is correct and FALSE if incorrect. Write your answer
before the number.
________1.The upward slope of the supply curve illustrates the law of demand— ―higher price
leads to a higher quantity supplied, and vice versa.
________2.The downward slope of the demand curve illustrates the law of supply—the inverse
relationship between prices and quantity demanded.
________3.Time is important to supply because suppliers must react quickly to a change in
demand or price.
________4.A shift in a demand or supply curve occurs when quantity demanded or supplied
changes even though price remains the same.
________5.The law of supply says that ―at higher prices, sellers will supply more of economic
goods‖.
Activity 1.6: Multiple Choice Questions
Directions: Read the sentences carefully. Encircle the correct answer.
6. An increase in the price of electricity bill will force you to:
a. increase your demand for kerosene heaters and coal.
b. increase your demand for light bulbs and aircon.
c. increase your demand for stereos and videokes.
d. increase your demand for TVs and use of gadgets.

7. The market demand curve for apple shows the:

a. effect on market supply of a change in the demand for apple
b. quantity of an apple that consumers like to buy at different prices.
c. marginal cost of producing and selling different quantities of an apple.
d. effect of advertising expenditures on the market price of an apple.

8. Economies experience an increased in unemployment and a reduced of activity during

recession. How does recession affect the market demand for new cars?
a. Demand for new cars shifts to the right.
b. Demand for new cars shifts to the left.
c. Demand for new cars has no shift
d. Demand for new cars either has or no shift
9. The market supply curve for gasoline shows the:
a. effect on market demand of a change in the supply of gasoline.
b. quantity of gasoline that firms offer for sale at different prices.
c. quantity of gasoline that consumers are willing to buy at different prices.
d. All of the above are correct.

10. If Toyota firm is producing a car faster than people want to buy, there is:
a. an excess supply of car and price can be expected to decrease.
b. an excess supply of car and price can be expected to increase.
c. an excess demand of car and price can be expected to decrease.
d. an excess demand and price can be expected to increase.
 WORKSHEET
Name______________________________Year/Section___________________Date_____

Teacher____________________________School___________________________________

A. Solving Problem and Critical Thinking Analysis

Directions: Analyze the problem carefully. In December, the price of “hamon”

rises and the number of ―hamon sold also rises. Is this a violation of the law of
demand? Justify your answer.

B.
REFERENCES
E-SITES
To further explore the concept learned today and if it possible to connect the internet, you may
visit the following links:
https://www.slideshare.net/lntrullin/supply-and-demand-1184484
https://www.ducksters.com/money/supply_and_demand.php

ARTICLES
Articles Amadeo, K. (2020) Elastic Demand: Definition, Formula, Curve, Examples. Retrieved
on Jun 03 2020 from https://www.thebalance.com/elastic-demand- definition-formula- curve-
examples-3305836; https://www.thebalance.com/inelastic-demand- definition- formula-curve-
examples-3305935
Buensuceso, N. (2011)Demand Supply and Market Equilibrium. Retrieved on June 3 2020
fromhttps://www.slideshare.net/opaprb/demand-supply-and-market-equilibrium- 8463331
Chappelow, J (2019) Law of Supply and Demand. Retrieved on June 03 2020 from
https://www.investopedia.com/terms/l/law-of-supply-demand.asp
Danabalan, K. (2014) The Price System. Retrieved on Jun 03 2020 from
https://www.slideshare.net/kalaiyarasidanabalan/a-level-economics-chapter-2-core
Patindol J L (2012)The Law of Supply and Demand . Retrieved on Jun3 03 2020 from
https://www.slideshare.net/shufflejoy000/the-law-of- supply-and-demand

WEBSITES
https://opentextbc.ca/principlesofeconomics/chapter/3-1-demand-supply-andequilibrium-in-
markets-for-goods-and-services/
https://www.investopedia.com/ask/answers/041615/what-are-some-examples-lawdemand-real-
markets.asp
https://www.ducksters.com/money/supply_and_demand_examples.php
https://www.thebalance.com/shift-in-demand-curve-when-price-doesn-tmatter-3305720
https://www.investopedia.com/ask/answers/012915/what-difference-betweeninelasticity-and-
elasticity- https://www.sparknotes.com/economics/micro/elasticity/problems/
https://int.search.myway.com/search/AJimage.jhtml
https://global.oup.com/us/companion.websites/9780199811786/student/chapt2/m ultiplechoice/
https://www.nytimes.com/2011/08/07/business/economy/marriage-and-the-law-ofsupply-and-
demand.html
https://www.majortests.com/essay/Supply-And-Demand-571384.html
https://study.com/academy/popular/supply-and-demand-activities-for-kids.html
https://www.slideshare.net/shufflejoy000/the-law-of-supply-and-demand
https://www.thoughtco.com/supply-and-demand-practice-questions-1146966