MAYBELYN GARCIA CORDERO
BSBA – ID
NOVEMBER 25, 2013
BASIC ANALYSIS OF DEMAND
Market is the interaction between buyers and sellers for trading or exchange. The consumer buys and the
seller sells. The most common type of market is a goods market. It may be a wet market like in Quinta
Market where people buy pork, chicken or fish. It may also consist of a dry market wherein people buy
shoes or clothes.
A Labor Market is where workers offer their services and employers look for workers to hire. We also
hear a stock market where commodities traded consist of securities of corporations
The Market is important because through it, a person who has excess goods can dispose of them, and a
person who feels a need for goods obtains them. It is through the market that price is determined through
the interaction between the buyers and sellers.
Is the quantity of a goods that buyers are willing to buy. A demand schedule shows the different quantities
that will be bought of a good, given various prices. This demand schedule may reflect an individual
schedule of a consumer or a market schedule of a group of consumers
A Demand function shows how the quantity demanded of a good is dependent on its determinants, the most
important of which is the price of the goods itself. The demand Curve is the graphical presentation of thre
Is the quantity of goods that sellers are willing to sell. The supply schedule shows the different quantities
that will be offered for sale various prices. This supply schedule may refect an individual schedule of only
one producer or the market schedule showing the aggregate supply of a group of sellers or producers.
A Supply function shows how the quantity offered for sale of a good is deopendent on its determinants, the
important of which is the price of the good itself. The supply curve is the Graphical Presentation of the
METHODS OF DEMAND & SUPPLY ANALYSIS
Change in Demand vs Change in Quantity Demanded
A. Change in Demand
A change in demand of a good means a change of the whole purchase plan. It is caused by
factors other than the change in the price of the good.
Graphically, a change in demand involves a shift of the demand curve. This means
greater/smaller quantiies demanded than before at the original prices.
Increase in demand
Decrease in demand
B. Change in quantity demanded
A change in quantity demanded of a good refers to a change of quantity
demanded as a result of price change of the good.
Graphically, the demand curve remains the same. The change is only shown by
a "movement along the demand curve" .
A change in quantity demanded - - "a
movement along a demand curve".
Suppose the price falls from $4 to $2, the quantity demanded will
increase from 2 units to 4 units.
Change in Supply vs Change in Quantity Supplied
A. Change in Supply
A change in supply is caused by factors other than the price of the product.
Graphically, it involves a shift of the supply curve, which implies greater/smaller
quantities supplied than before at the original prices.
Suppose there is a decrease in
supply, shifting the supply
curve from S1 to S1.
At the price P1, the quantity
supplied will decrease from
Q1 to Q2.
A decrease in supply
Suppose there is an increase
in supply, shifting the supply
curve from S1 to S2.
At the price P1, the quantity
supplied will then increase
from Q1 to Q2.
A increase in supply
B. Change in quantity supplied
A change in quantity supplied refers to a change in quantity offered for sale as
a result of a change in the price of the product.
Graphically, there is no shifting of supply curve, the change is represented by
"a movement along the supply curve" .
A change in quantity supplied - - "a
movement along a supply curve".
Suppose the price of a good increases from P1 to P2.
The quantity supplied will increase from Q1 to Q2.