BALLESTEROS, KYLA MAE P.

BSA-1B
SEPTEMBER 06, 2023
PROF. REBECCA T. GOROSPE

1. What is supply and demand analysis?

Supply and demand analysis is a fundamental tool to understand the market. It is also about the
interaction between the buyers and sellers to determine the prices of the goods and its quantities.
With the study of supply and demand analysis, it is shown how prices vary depending on the
number of buyers and sellers to a particular product. This analysis is based on the laws of supply
and demand.

2. What is demand curve?

Demand curve is a graph that shows the change in demand because the prices change. It is the
representation of the laws of demand. The vertical axis denotes the price and the horizontal axis,
the demand. It is useful when sellers based their decisions on what prices do people buy more.

3. Enumerate at least 5 demand shifters

a. Consumers’ preferences
b. Weather
c. Changes in consumers’ income
d. Expectations
e. Number of buyers

4. Define the following:

a. Complement goods
Complement goods are two or more goods that are always typically used together. For instance,
cereal and milk are example of complementary goods so when the price of cereal increases,
consumers may decrease their consumption of the milk.

b. Price ceiling
Price ceiling is a type of price control and the highest or maximum price by which a price or a
service is sold. It is to protect the buyers from overpricing that is sometimes done by the sellers.

c. Price floor
Price floor, meanwhile, is a type of price control and the lowest or minimum price by which a
price or service is sold. It is the benchmark and keeps the price from falling in a particular level.
5. What is demand function?

Demand function is the final step in analyzing the demand in the market. It is the summary of
the factors that affect the demand of a particular good. It is a mathematical equation that
presents the quantity of the product consumed when it is affected by the price and other demand
shifters.

6. What is linear demand function?

Linear demand function is an algebraic formula used to calculate the demand curves without
the need to draw a demand function graph. It describes the relationship between variables such
as the quantity demanded and its factors affecting the demand. Economists make use of these to
analyze how the people demand the good in a certain price or how it is after being affected by
some factors.

7. What is market supply curve?

Market supply curve is the relationship between the cost of a good or service and the quantity
supplied for a given period. It is how the sellers are willing to offer to the market with a certain
price. The graph is an upward sloping curve because it means there is a positive correlation
between the price and the supply. You will observe that as long as the price increases, the supply
also increases. It is because the firm will have more profits, hence, they will produce more.

8. Enumerate at least 5 supply shifters.

a. Number of sellers
b. Natural events (flood, fire, earthquake)
c. Technological advancements
d. Prices of the factors of production
e. Prices of the complimentary and substitute goods

9. What is supply function?

Supply function is a tool used to measure the relationship between the quantity supplied, the
price of the product, and other supply shifters. It is also known as the “supply curve” and it is
the graphical representation of the law of supply. This helps the economists whether to supply
more of the goods or not if the price had changes.

10. What is linear supply function?

Linear supply function is an algebraic formula used to calculate the supply curves without the
need to draw a supply function graph. It describes the relationship between variables such as the
quantity supplied and its factors affecting the supply. Economists make use of these to analyze
how the sellers produce more quantity of goods in a certain price.
 REFERENCES

Abogas and Eastin. Demand and Supply Analysis: Introduction. Retrieved from
https://www.cfahttps://www.linkedin.com/advice/0/what-best-practices-conducting-demand-
supply-analysis
institute.org/-/media/documents/support/programs/cfa/prerequisite-economics-material-demand-
and-supply-analysis-intro.pdf

Vaidya, D. Demand and Supply Analysis. https://www.wallstreetmojo.com/demand-and-supply-

analysis/
Junior Achievement Economics. Demand Shifters and Supply Shifters. Retrieved from
https://sites.google.com/ja.org/ja-econ-resources/home/demand-supply

Segal, T. Price Ceiling Types, Effects, and Implementations in Economics. Retrieved from
https://www.investopedia.com/terms/p/price-
ceiling.asp#:~:text=A%20price%20ceiling%2C%20aka%20a,or%20rising%20out%20of%20con
trol

Vaidya, D. Supply Function. Retrieved from https://www.wallstreetmojo.com/supply-

function/

Vedantu. Supply Function. Retrieved from https://www.vedantu.com/commerce/supply-

function

Vaidya, D. Demand Function. Retrieved from https://www.wallstreetmojo.com/demand-

function/

Catherine S. The Market Supply Curve: Definition, Principles & Equation. Retrieved from
https://study.com/academy/lesson/the-market-supply-curve-definition-principles-
equation.html