2. INTRODUCTION
•Demand and supply are very important
when we are talking about the market. It
is because these two set the quantity and
price of the products that both the
consumers and producers agreed upon-
and that is what we call Equilibrium.
4. EQUILIBRIUM
•WHEN THE QUANTITY DEMANDED
AND QUANTITY SUPPLIED MEET AT A
CERTAIN PRICE.
•THERE IS A BALANCE RELATIONSHIP
BETWEEN SUPPLY AND DEMAND ON
A GIVEN PRICE.
5. EQUILIBRIUM
•It happens when the consumer and producer
agreed upon a certain price.
▫ Example: You need to buy 100 kilos of tomatoes
and a vendor has also 100 kilos of tomatoes to
sell. And you agreed upon the price.
9. EQUILIBRIUM SCHEDULE
• A table that shows the relation of the price, demand,
and supply. It also shows, in what price did the
demand and supply meet.
10. EQUILIBRIUM CURVE
•This is the result of the consolidated
equilibrium schedule.
•The Qd/Qs will be on the X-Axis
•The price will be on the Y-Axis
14. •THERE IS NO AGREEMENT BETWEEN
THE CONSUMER AND PRODUCER
•THE PRODUCER DID NOT MEET THE NEEDS
OF THE CONSUMER
•AND VICE VERSA
•THIS CAN LEAD INTO TWO MAJOR
PROBLEMS IN THE MARKET.
DISEQUILIBRIUM
17. •IT IS WHEN QD>QS
▫ Shortage is the amount by which the quantity
demanded exceeds the quantity supplied
•THE DEMAND OF THE CONSUMERS IS
GREATER THAN THE SUPPLY OF THE
PRODUCERS
SHORTAGE
18. •Sellers are likely to begin to raise their prices
Market Solution for SHORTAGE
20. •IT IS WHEN QS>QD
▫ More generally, a surplus is the amount by which
the quantity supplied exceeds the quantity
demanded at the current price.
•THE SUPPLY OF THE PRODUCERS IS
GREATER THAN THE DEMAND OF THE
CONSUMERS
Surplus
21. •Sellers will begin to reduce their prices to clear
out unsold coffee
Market Solution for Surplus
23. •IT IS WHEN THE GOVERNMENT
PREVENTS A PRICE FROM RISING
ABOVE A CERTAIN LEVEL OR MAXIMUM
▫ A maximum allowable price set below the
equilibrium price is a price ceiling
•This is to protect the consumer from
unwanted and uncontrollable price
increase that can be set by the supplier/seller.
PRICE CEILING
24. • IT IS WHEN THE GOVERNMENT PREVENTS A
PRICE FROM FALLING BELOW A CERTAIN
LEVEL OR THE MINIMUM
▫ A minimum allowable price set above the equilibrium
price is a price floor
• This is to protect the suppliers/sellers and not
keep on finding their own equilibrium price by
lowering the prices
PRICE FLOOR
