Activity

No. of Household Members: __

Allotted No. of units
Item Name Price per unit
Budget bought
LESSON 3

Supply and
Demand
APPLIED ECON.
Meanings
DEMAND means the
desire for a particular good
backed up by sufficient
purchasing power.
SUPPLY is the quantity of
a commodity that is in the
market and available for
purchase at a particular
price.
 Demand and
Supply Schedules
Price of Beef
QD in kilos
(per kilo)

₱300 20

250 40

DEMAND SCHEDULE reflects

200 60 the quantities of goods and
Price of Rice
(per sack)
QS (₱50/kilo) services demanded by a consumer
or an aggregate of consumers at
₱600 300
any given price.
500 250
SUPPLY SCHEDULE shows
the different quantities that are
400 200 offered for sale at various prices.
The Law of
Demand and
Supply
LAW OF DEMAND - "The
quantity of commodity
which buyers will buy at a
given time will vary
inversely with the price".
LAW OF SUPPLY - "The
quantity offered for sale will
vary directly with price".
 Show the
QD Price QS

demand and
150 ₱30 900

supply
300 25 800

curves in
350 20 700

your
600 15 600

notebook. 800 10 400

 Activity

Fave Oh no! But...

Determinants of
Demand

Income

Population

Tastes and Preferences

Determinants of
Demand

Price expectations

Prices of related goods

Determinants of
Supply

Technology

Cost of production

Number of sellers
Determinants of
Supply

Taxes and Subsidies

Weather
The Ceteris
Paribus
Assumption
LAW OF DEMAND - As price
increases, QD decreases, and as
price decreases, QD increases.
--> True if we apply the Ceteris
Paribus assumption.
LAW OF SUPPLY - The quantity
offered for sale will vary directly
with price.
--> Only correct if we apply the
Ceteris Paribus assumption.
Change in
Demand
Change in
Supply
Alfred Marshall
a British economist who
introduced a kind of
pricing scheme by
combining the law of
demand and the law of
supply, formulating an
equilibrium price and
equilibrium quantity
Supply and QS P QD

Demand
3 ₱3 24

Shortage
Schedules
6 6 20

9 9 16

indicating 12 12 12

the Pe and 15 15 8

Surplus
Qe 18 18 4
Change in Pe
and Qe due to
Shift of the
Supply Curve
Change in Pe
and Qe due to
Shift in the
Demand
Curve
The Law of
Demand and
Supply
When supply is greater than
demand, price decreases.
When demand is greater
than supply, price increases.
When supply is equal to
demand, price remains
constant. This is the
MARKET EQUILIBRIUM.
 What happens to QD Price QS

the Pe and Qe if 150 ₱30 900

market supply
increases by 5% at 300 25 800

all price levels 350 20 700

without any
increase in 600 15 600

demand? 800 10 400

THANK YOU!
Do you have any questions?