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Presentation

1. The Market
Forces of Supply
and Demand
GROUP 2

2. 1 Introduction to Market Forces
2 Demand Factors
3 Supply Factors
4 Market Equilibrium
Topics Covered

3. Market forces refer to the
economic factors that
influence the supply and
demand of goods and
services in the market.
They encompass the
interactions between
buyers and sellers,
determining prices and
quantities.

4. NO SUPPLY AND DEMAND?

5. A market is a group of
sellers of a particular
good or service.
What is Market?

6. What is Competitive
Market?
A market in which there are many
sellers and many buyers
so each has negligible impact on the
market price.

7. THE DEMAND CURVE:
The Relationship
between price and
quantity demanded
DEMAND

8. the amount of a goods
that buyers are willing and
able to purchase.
Quantity
demanded
the claim that ,other things
equal, the quantity demanded
of good falls When the price
of the good rises.
Law of
demand

9. a table that shows the
relationship between the
price of a good and the
quantity demanded.
Demand
Schedule
a Graph of a relationship
between the price of good
and the quantity demanded.
Demand
Curve

11. MARKET DEMAND VERSUS
INDIVIDUAL DEMAND

12. SHIFTS IN THE DEMAND
CURVE

13. Normal good
the money you receive in
exchange for your labor
or products.
Income
If the demand for good falls,
when income falls, the good
is called normal goods
a good for which,
other things equal, an
increase an income
leads to an increase in
demand.

14. Prices of
related goods
a good for which,other
things equal, an increase
in income leads to a
decrease in demand.
Inferior good
Influences demand
through the principles
of substitutes and
complements.

15. Complements
two goods for which an
increase of the price one
leads to an increase in the
demand for the other.
Substitute
two goods for which
an increase in the price
of one leads to a
decrease in the
demand for the other.

17. Quantity Supplied Law of supply
The amount of a
good that sellers are
willing and able to
sell
The claim that, other
things equal the
quantity supplied of a
good rises when the
price of the good rises

18. Supply schedule
Supply curve
A table that shows
the relationship
between the price of
a good and the
quantity supplied
a graph of the
relationship between
the price of a good and
the quantity supplied

20. is the sum of the
supplies of all sellers
Market supply

21. because the market supply
curve holds other things
constant, the curve shifts
when one of the factors
changes.
Shifts in the
Supply Curve

22. Here are some of the
most important factors;
Input prices.
When the price of one or more of these inputs
rises, producing certain product less profitable,
and firms supply less.
01
Technology.
Advance in technology raised the supply of
certain product.
02

23. Expectations
The amount of certain product a firm supplies today may
depend on its expectations about the future.
Number of sellers
Market supply depends on the number of sellers.
03
04

24. Supply and demand are
two fundamental forces
that drive prices in a
market.

25. a situation in which the
market price has
reached the level at
which quantity supplied
equals quantity
demanded
Equilibrium

26. a situation in which
quantity demanded is
greater than quantity
supplied
Shortage

27. a situation in which quantity
supplied is greater than
quantity demanded
Surplus

29. The equilibrium price is sometimes
called the MARKET-CLEARING
PRICE, because at this price,
everyone in the market has been
satisfied: Buyers have bought all
they want to buy, and sellers have
sold all they want to sell.