The Concepts of Law of Demand and Supply.pptx

Law of Demand and Supply

1. Lesson 2.1 The Law of Demand and Supply

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3. The global pandemic changed the pattern of global supply chains. ‹#›

4. What caused these changes in prices and supply? ‹#›

5. ‹#› Explain the law of supply and demand, and how equilibrium price and quantity are determined (ABM_AE12-Ie-h-4).

6. ‹#› Identify and differentiate the different types of market systems. Differentiate between quantity demanded and demand; and quantity supplied and supply. Create a demand and supply schedule. Construct a demand and supply curve. Explain how market equilibrium is achieved.

7. In this activity, put yourselves in the shoes of both buyer and seller. Choose which items to buy or sell. First round: You are the buyers. Which is which? ‹#›

8. Which would you buy? ‹#› ₱1,550 ₱950

9. Which would you buy ? ‹#› ₱1,200 ₱700

10. Which would you buy ? ‹#› ₱899 ₱1,199

11. Which would you buy ? ‹#› ₱2,100 ₱1,799

12. Which would you buy ? ‹#› ₱350 ₱500

13. In this activity, put yourselves in the shoes of both buyer and seller. Choose which items to buy or sell. Second round: You are the sellers . Which is which? ‹#›

14. Which would you sell ? ‹#› ₱1,200 ₱700

15. Which would you sell ? ‹#› ₱1,550 ₱950

16. Which would you sell ? ‹#› ₱350 ₱500

17. Which would you sell ? ‹#› ₱2,100 ₱1,799

18. Which would you sell ? ‹#› ₱899 ₱1,199

19. In the first round, which of the following items do you wish to buy? Why? ‹#›

20. In the second round, which of the following items do you wish to sell? Why? ‹#›

21. What is the difference between the choices you made as a buyer and as a seller? ‹#›

22. ‹#› Why is there a need to learn fundamental economic concepts?

23. Market This is where buyers and sellers meet to exchange goods and services. ‹#›

24. Market The dynamics of the market depends on how the government manages it. ‹#› Two classifications: Free market economy Command economy

25. Market Free Market Economy ‹#› Also known as capitalism Adopts a laissez-faire approach with limited government intervention Economic players are driven by self-interest .

26. Market Command Economy ‹#› A lso known as socialism or communism The government owns most properties and resources, and economic decisions are made through a central economic plan.

27. Law of Demand As prices increase, quantity demanded decrease s . Conversely, as prices decrease, quantity demanded increase s . ‹#› The demand curve

28. Law of Demand Keeping factors constant or at ceteris paribus , buyers will purchase more at lower prices and less at higher prices. ‹#›

29. Law of Demand Qd = a - b(P) Where: Qd is for quantity demanded a is for other non-price factors b is for the slope of the demand curve P is for price ‹#›

30. Law of Demand Quantity Demanded It is the number of units that a buyer is willing to purchase at any given price. Demand It is the set of all quantities demanded at different price levels. ‹#›

31. ‹#› ‹#› Is quantity demanded the same as demand? Why or why not?

32. ‹#› Juan is a school principal who plans to purchase notepads. His willingness and capacity to buy chairs can be described by the equation Qd = 150 - 3P. Create a demand schedule and a demand curve where the average price of a notepad is at ₱ 20, ₱ 30, and ₱ 40.

33. ‹#› Step 1: Applying the rule of substitution, solve for Qd using the demand function Qd = 150 - 3P. Qd = 150 - 3P Qd = 150 - [3(20)] Qd = 150 - 60 Qd = 90

34. ‹#› Step 2: Repeat Step 1 for price levels ₱30 and ₱40. When P = 30: When P = 40: Qd = 150 - 3P Qd = 150 - 3P Qd = 150 - [3(30)] Qd = 150 - [3(40)] Qd = 150 - 90 Qd = 150 - 120 Qd = 60 Qd = 30

35. ‹#› Step 3: Create the demand schedule. Price (P) Quantity demanded (Qd) ₱ 20 90 ₱ 30 60 ₱ 40 30

36. ‹#› Step 4: Plot the points in a graph.

37. ‹#› Nita loves fashion. Her willingness and capacity to buy clothes can be described by the equation Qd = 80 - P. Create a demand schedule and a demand curve where the average price of clothing is at ₱ 25, ₱ 35, and ₱ 45.

38. Law of Supply As prices increase, quantity supplied increases. Consequently, as prices decrease, quantity supplied decreases. ‹#› The supply curve

39. Law of Supply Driven by profits, suppliers will sell more with higher prices and less at lower prices. ‹#›

40. Law of Supply Qs = a + b(P) W here: Qs is for quantity demanded a is for other non-price factors b is for the slope of the supply curve P is for price ‹#›

41. Law of Supply Quantity Supplied It is the number of units that a seller is willing to produce at any given price. Supply It is the set of all quantities supplied at different price levels. ‹#›

42. ‹#› ‹#› Why does the supply curve go up?

43. ‹#› Rey is a friend of Juan and he sells notepads. His willingness and capacity to sell notepads can be described by the equation Qs = 150 + 2P. Create a supply schedule and a supply curve where the average price of a notepad is at ₱20, ₱30, and ₱40.

44. ‹#› Step 1: Applying the rule of substitution, solve for Qs using the supply function Qs= 150+ 2P. Qs = 150+ 2P Qs = 150+ [2(20)] Qs = 150+ 40 Qs = 190

45. ‹#› Step 2: Repeat Step 1 for price levels ₱30 and ₱40. When P = 30: When P = 40: Qs = 150 + 2P Qs = 150 + 2P Qs = 150 + [2(30)] Qs = 150 + [2(40)] Qs = 150 + 60 Qs = 150 + 80 Qs = 210 Qd = 230

46. ‹#› Step 3: Create the supply schedule. Price (P) Quantity supplied (Qs) 20 1 90 30 210 40 2 30

47. ‹#› Step 4: Plot the points in a graph.

48. ‹#› Anna is a garment manufacturer. Her willingness and capacity to supply clothes can be described by the equation Qs = 65 + 4P. Create a supply schedule and curve where the average price of clothing is at ₱ 25, ₱ 35, and ₱ 45.

49. Market Equilibrium Market equilibrium is the point where the quantity demanded is equal to the quantity supplied. The price where the quantity demanded is equal to the quantity supplied is called the equilibrium price or the market clearing price . ‹#›

50. Rearrange the letters to form the correct answer. Who is responsible for regulating markets? ‹#› V E R M E N N G O T

51. Rearrange the letters to form the correct answer. It is where buyers and sellers meet to exchange goods and services. ‹#› T M R E K A

52. Rearrange the letters to form the correct answer. It is the ability and willingness of buyers to purchase goods and services. ‹#› D D U Y D N A Q T A M T E N E I

53. Rearrange the letters to form the correct answer. It is the ability and willingness of sellers to produce goods and services ‹#› P Q I I P L E T U D N A S T Y U

54. Rearrange the letters to form the correct answer. It describes the inverse relationship between price and quantity demanded. ‹#› D M D O W E A L N F A

55. ‹#› There are two market systems, free market or capitalism , and command economy or communism or socialism . Many countries adopt a mixed market system where it adopts both capitalist and socialist ideas.

56. ‹#› The law of supply states that as price increases, quantity supplied increases; as price decreases, quantity supplied also decreases. The law of demand states that as price increases, quantity demanded decreases; as price decreases, quantity demanded increases.

57. ‹#› Quantity demanded and quantity supplied reflects buyers' willingness and ability to purchase and sellers' willingness and ability to produce goods and services. Market equilibrium is the point where quantity supplied is equal to quantity demanded.

58. ‹#› The price at which quantity demanded and quantity supplied are equal is called equilibrium price or market clearing price .

59. Create a realistic scenario of market activity. Be sure to include the buyers and sellers, what goods or services they are exchanging, and where the activity is happening.

60. Courtesy of the Department of Trade and Industry.

61. 2020-04-04-Maskenproduktion COVID-19-8505 b y Superbass is licensed under CC BY-SA 4.0 via Wikimedia Commons .