DYNAMICS OF
MARKETS
DEMAND AND SUPPLY (grade 10)
L. MGAGA 201244296
Introduction
The following slides are the compilation of different
slides from five different authors about the topic
Dema...
Topics:
• Demand
Define demand
Law of demand
Demand Schedule
(elasticity of demand)

Factors Affecting
Demand curve (g...
Demand
Definition: The amount of a particular economic good or
service that a consumer or group of consumers will want to
...
Demand schedule
Demand Schedule

Demand Curve

Price [Rs per unit]

Quantity demanded of X
[kg. per month]

a
b
c
d
e
f

0...
Elasticity of demand
Factors effecting demand curve
(movements and shifts along the curve)
1. Change in taste
2. Prices of other goods
• Substi...
1.Changes in taste (shift in demand)
• Consumers prefer platform shoes.
• At $50, demand increases from 100 to 200.

$50

...
2.2.1Change in Prices of other goods
(substitute)
Increase in demand

E.g.: Price of coke increases,
demand of Pepsi incre...
2.2.Change in Prices of other
goods
(Complements)Decrease in demand
(they work together)

E.g.: Price of tea increases,
de...
3.Change in Income

The increase in income
increases the quantity of
goods demanded (demand
increases shifts rightward)

P...
4.Change in Government Regulation
(Sales tax)

Price

Decrease in demand

D1

Quantity X
SUPPLY:
• Definition: The total amount of a good or

service available for purchase; along with
demand, one of the two key...
Supply Schedule
The increase in price increases the
quantity supplied, e.g. price increase
from 2 to 4 an quantity increas...
Factors that effect the Supply
curve
•
•
•
•
•

Technology
Changes in prices of Alternative Goods
Changes in Relevant Reso...
1.Changes in technology

• Technology is the economy’s stock of knowledge about how
to combine resources efficiently

Impr...
Changes in prices of Alternative
Goods
• Alternative goods
• Other goods that use
some or all of the same
resources as the...
Changes in Relevant
Resources

• Resources that are employed in the
production of the good in question

• Increase in pric...
Changes in the Number of
Producers
• As the number of producers change so does the
supply of the product

• A decrease in ...
Changes in Producers
Expectations
• Expectation of future prices of resources or their
own product can cause producers to ...
Demand, Supply & Market
equilibrium
• Market

Market Equilibrium

• Includes all the arrangements
used to buy and sell

• Reduce transaction costs
• The place...
Equilibrium
P

• At specific price where:
Quantity demanded

S

Equals
Quantity Supplied

$5

Equilibrium

D
Q
150
EQUILIBRIUM SHORTAGE VS
SURPLUS
Surplus

When price > equilibrium price, then quantity supplied > quantity
demanded.
•Ther...
EQUILIBRIUM- shortage
P Price of quantity
5

S

4
3
2

Shortage

1

2

4

6

8

Q

10 12 14 16

Quantity
EQUILIBRIUM- surplus
Extent to which
generation of goods,
services, and resources
(such as capital) exceeds
their consumpt...
Summary of demand, supply &equilibrium
Change in Change in
Effect on
Effect on
Supply
Demand Equilibrium Equilibrium
Price...
References
• Ankit Bist (2011) DEMAND AND SUPPLY at http://www.slideshare.net/AnkitBist/demand-andsupply-10629356?qid=94fd...
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Complilation powepoint final

  1. 1. DYNAMICS OF MARKETS DEMAND AND SUPPLY (grade 10) L. MGAGA 201244296
  2. 2. Introduction The following slides are the compilation of different slides from five different authors about the topic Demand and Supply. Authors : Ankit Bist Ujjwal 'Shanu‘ KASBIT Jiten Sharma NepDevWiki
  3. 3. Topics: • Demand Define demand Law of demand Demand Schedule (elasticity of demand) Factors Affecting Demand curve (graphs) Markets equilibrium • Supply Define supply Law of supply Supply Schedule Factors Affecting Supply curve (graphs) Elasticity
  4. 4. Demand Definition: The amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price •Law of demand :States that a quantity of a good demanded during a given period relates inversely to its price, other things constant. •Price increases  Quantity Demanded decreases •Price decreases  Quantity demanded increases •Creates a downward sloping demand curve
  5. 5. Demand schedule Demand Schedule Demand Curve Price [Rs per unit] Quantity demanded of X [kg. per month] a b c d e f 0.50 1.00 1.50 2.00 2.50 3.00 7.0 5.0 3. 5 2.5 1.5 1.0 3.00 f e 2.50 d Price of X Point 2.00 c 1.50 b 1.00 a 0.50 1 2 3 4 5 6 7 Quantity of X
  6. 6. Elasticity of demand
  7. 7. Factors effecting demand curve (movements and shifts along the curve) 1. Change in taste 2. Prices of other goods • Substitute • Complement 3. Income 4. Government rules and regulation
  8. 8. 1.Changes in taste (shift in demand) • Consumers prefer platform shoes. • At $50, demand increases from 100 to 200. $50 D 100 200 D2
  9. 9. 2.2.1Change in Prices of other goods (substitute) Increase in demand E.g.: Price of coke increases, demand of Pepsi increases Price Suppose the two cold drinks coke and Pepsi are substitutes D D 2 Quantity (Pepsi)
  10. 10. 2.2.Change in Prices of other goods (Complements)Decrease in demand (they work together) E.g.: Price of tea increases, demand of sugar decreases Price Suppose tea and sugar are complements D1 D Quantity (sugar)
  11. 11. 3.Change in Income The increase in income increases the quantity of goods demanded (demand increases shifts rightward) Price Increase in demand D2 D Quantity X
  12. 12. 4.Change in Government Regulation (Sales tax) Price Decrease in demand D1 Quantity X
  13. 13. SUPPLY: • Definition: The total amount of a good or service available for purchase; along with demand, one of the two key determinants of price. Law of supply: If demand is held constant, an increase in supply leads to a decreased price, while a decrease in supply leads to an increased price.
  14. 14. Supply Schedule The increase in price increases the quantity supplied, e.g. price increase from 2 to 4 an quantity increases from 3 to .
  15. 15. Factors that effect the Supply curve • • • • • Technology Changes in prices of Alternative Goods Changes in Relevant Resources Changes in the Number of Producers Changes in Producers Expectations
  16. 16. 1.Changes in technology • Technology is the economy’s stock of knowledge about how to combine resources efficiently Improvements in technology Causes an increase in supply More of the product is available at all prices
  17. 17. Changes in prices of Alternative Goods • Alternative goods • Other goods that use some or all of the same resources as the good in question Price S1 $6 • Beef and leather. • If the price of beef decreases, producers will supply less beef thus decreasing the supply of leather. 300 Q Leather 400 Above is the market for the supply of leather
  18. 18. Changes in Relevant Resources • Resources that are employed in the production of the good in question • Increase in price of resources $9 S1 S2 500 600 • Results in decrease in supply • Less of the good is available at all prices
  19. 19. Changes in the Number of Producers • As the number of producers change so does the supply of the product • A decrease in the number of producers will lead to a decrease in supply
  20. 20. Changes in Producers Expectations • Expectation of future prices of resources or their own product can cause producers to change what they offer at each individual price
  21. 21. Demand, Supply & Market equilibrium
  22. 22. • Market Market Equilibrium • Includes all the arrangements used to buy and sell • Reduce transaction costs • The place where buyers and sellers meet to determine price and quantity
  23. 23. Equilibrium P • At specific price where: Quantity demanded S Equals Quantity Supplied $5 Equilibrium D Q 150
  24. 24. EQUILIBRIUM SHORTAGE VS SURPLUS Surplus When price > equilibrium price, then quantity supplied > quantity demanded. •There is excess supply or a surplus. •Suppliers will lower the price to increase sales, thereby moving toward equilibrium. Shortage When price < equilibrium price, then quantity demanded > the quantity supplied. •There is excess demand or a shortage. •Suppliers will raise the price due to too many buyers chasing too few goods, thereby moving toward equilibrium.
  25. 25. EQUILIBRIUM- shortage P Price of quantity 5 S 4 3 2 Shortage 1 2 4 6 8 Q 10 12 14 16 Quantity
  26. 26. EQUILIBRIUM- surplus Extent to which generation of goods, services, and resources (such as capital) exceeds their consumption is called surplus. P 5 Surplus S 4 3 2 D 1 2 4 6 8 Q 10 12 14 16 Quantity
  27. 27. Summary of demand, supply &equilibrium Change in Change in Effect on Effect on Supply Demand Equilibrium Equilibrium Price Quantity Increase Decrease Decrease Indeterminate Decrease Increase Increase Indeterminate Increase Increase Indeterminate Increase Decrease Decrease Indeterminate Decrease
  28. 28. References • Ankit Bist (2011) DEMAND AND SUPPLY at http://www.slideshare.net/AnkitBist/demand-andsupply-10629356?qid=94fd494d-bed6-4867-a65f-f0d7a1e25582&v=default&b=&from_search=4 • Ujjwal Shanu (2013) DEMAND AND SUPPLY at http://www.slideshare.net/ujjmishra1/demandand-supply-28840569?qid=94fd494d-bed6-4867-a65f-f0d7a1e25582&v=default&b=&from_search=8 • KASBIT (2011) Basic elements of supply and demand, at http://www.slideshare.net/imranbashir69/basic-elements-of-supply-and-demand • Jiten Sharma (2012) demand and supply at http://www.slideshare.net/JitenSharma1/demandsupply-market-equilibrium-15222434 • NepDevWiki (2012) 05 price elasticity of demand and supply at http://www.slideshare.net/NepDevWiki/05-price-elasticity-of-demand-and-supply

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