This ppt is about economics and basic concepts of demand and supply.• Make the students to explore their views and knowledge about Economics & Business in Indian context • Make them to understand the Flow in Economy • Make each and every one in the group to speak, share their views in an organized way. This debate ensures the knowledge and understanding level about the basics ideology of economics • It also motivates each and everyone to participate in the group activity without any fear Two important considerations arise in all applications of supply and demand analysis. First, the shapes of the supply and demand curves must be established within the context of the problem being analyzed. Second, the forces leading to shifts in the supply and demand curves must be determined in the case at hand. The effects of the forces shifting the supply and demand on the equilibrium price and quantity can then be obtained. It is defined as the degree of responsiveness of quantity demanded of a commodity due to change in its price when other factor remaining constant. Price elasticity of Demand is usually measured by the following formula : Price elasticity of demand = % Change in Quantity Demand / % Change in Price The concept of price elasticity of demand helps the firm to decide whether or not to increase the price of their product. Only if the product is inelastic in nature, then raising of price will be beneficial. On other hand, if the product is elastic in nature, then a rise in price might lead to considerable fall in demand. Therefore the price of different commodities are determined on the basis of relative elasticity.

1. ANALYZING THE EFFECTS
OF PRICE CHANGES ON
THE MARKET FOR A
SPECIFIC PRODUCT
.

2. Objective
The objective of this mini-project is to understand and
apply the principles of demand and supply, elasticity,
and equilibrium to analyze the market for a specific
product. You will investigate how changes in price
and other factors impact supply and demand, and
ultimately, the market equilibrium.

3. Steps:
1. Select a Product:
• Choose a specific product or service. For example, you can choose
something like smartphones, coffee, or a local service.
• Criteria for selecting a product:
i. Technical Know-how
ii. Availability of Market
iii. Financial Strength
iv. Competitive Rivalry

4. v. Product Category
vi. Consistency in Demand
2.Collect Data
◦ Gather data on the historical price and quantity sold of the chosen
product. You can use sources like historical sales data, market reports,
or online databases.

5. 3. Create Demand and Supply Curves:
Based on the data collected, create demand and supply curves for the
chosen product.
Analyze the elasticity of demand and supply for the product. Calculate
price elasticity using the formula: (% Change in Quantity Demanded /
% Change in Price).

6. 4. Analyze Equilibrium:
Identify the initial equilibrium price and quantity for the product.
Discuss factors that may have influenced this equilibrium.
Equilibrium is achieved at the price at which quantities
demanded and supplied are equal. We can represent a
market in equilibrium in a graph by showing the
combined price and quantity at which the supply and
demand curves intersect.
Example, imagine that sellers of squirrel repellant are
willing to sell 500 units of squirrel repellant at a price
of $5 dollar sign, per can. If buyers are willing to
buy 500 units of squirrel repellent at that price, this
market would be in equilibrium at the price of $5dollar
sign, and at the quantity of 500 cans.

7. 5. Introduce a Change:
Choose a scenario where something changes in the market, e.g., a
technological advancement, government policy, or a change in consumer
preferences. This could be a shift in a curve or a movement along the
curve.
6. Analyze the Impact:
• Determine how the change affects demand, supply, and the market
equilibrium.
• Calculate the new equilibrium price and quantity.
7. Comparative Statics:
• Compare the initial equilibrium with the new equilibrium after
the change.
• Discuss the implications of the change on producers, consumers,
and the overall market.

8. Changes in equilibrium price and
quantity: the four-step process
◦ Step 1. Draw a demand and supply model representing
the situation before the economic event took place.
◦ Step 2. Decide whether the economic event being analyzed
affects demand or supply.
◦ Step 3. Decide whether the effect on demand or supply
causes the curve to shift to the right or to the left, and
sketch the new demand or supply curve on the diagram.
◦ Step 4. Identify the new equilibrium and then compare the
original equilibrium price and quantity to the new
equilibrium price and quantity.

9. Conclusion
In conclusion, this mini-project provided a comprehensive exploration of key economic principles
related to demand and supply, elasticity, and market equilibrium within the context of a specific
product or service. Through the analysis of the market for the chosen product, several important
insights were gained:
◦ 1. Demand and Supply Curves: We constructed demand and supply curves based on historical
data, illustrating the relationship between price and quantity demanded and supplied. These
curves served as the foundation for our analysis.
◦ 2. Elasticity: By calculating the price elasticity of demand and supply, we assessed the
responsiveness of consumers and producers to changes in price. Understanding elasticity helped
us predict how changes in price might affect the quantity bought and sold.

10. .
◦ 3. Equilibrium: The initial equilibrium point, where demand and
supply intersected, was identified. This point represented the price and
quantity at which the market was in balance.
◦ 4. Change Scenario: We introduced a change scenario, reflecting a real-
world event or shift in factors affecting the market. This change could
be a shift in a curve (e.g., a change in consumer preferences) or a
movement along the curve (e.g., a change in price).
◦ 5. Impact Analysis: The impact analysis demonstrated how the change
affected the market. We observed shifts in both demand and supply,
leading to a new equilibrium price and quantity. This change had
repercussions for both consumers and producers.

11. .
◦ 6. Comparative Statics: Comparing the initial equilibrium with the new equilibrium post-
change allowed us to evaluate the broader implications of the scenario. We considered how
producers and consumers fared under the new conditions and examined any potential market
inefficiencies.
◦ In summary, this mini-project underscores the dynamic nature of markets and the critical role
of demand and supply in determining prices and quantities. It highlights the importance of
understanding elasticity as it informs businesses and policymakers about the likely effects of
price changes on market participants. Equilibrium serves as a point of reference, but real-world
markets are subject to constant shifts and adjustments.
◦ By engaging in this analysis, we've gained valuable insights into the practical application of
economic concepts and their impact on decision-making in the business world and beyond.
This project exemplifies how economic principles can be used to analyze and make sense of
real-world market dynamics, providing a foundation for more informed economic decision-
making.