Simple Compilation from different authors with illustrations.

1. THE ELEMENTS OF DEMAND AND SUPPLY
OBJECTIVES:
1.Familiarize with the concepts of demand and
supply
2.State the Law of Demand and the Law of Supply
3.Identify the determinants of demand and supply
4.Explain how the forces of demand and supply
interact to attain equilibrium in the market
5.Apply the Law of Demand and Supply to different
economic situations.

2. Terms to Remember:
Market – a place where buyers and sellers
interact and engage in exchange
Demand – reflects the consumer’s desire for a
commodity
Supply – the amount of a commodity available
for sale
Demand Schedule – the quantities consumers
are willing to buy of a good at various
prices
Supply Schedule – the quantities producers are
willing to offer for sale at various
prices

3. Terms to Remember:
Shift of the curve – a change in the entire
curve caused by a change in the
entire demand or supply
schedule
Non-Price factors – also known as
parameters, are factors other
than that also affect demand
and supply
Demand Function – shows how quantity
demanded is dependent on its
determinants

4. Terms to Remember:
Supply Function –shows how quantity
supplied is dependent on its
determinants
Equilibrium – condition of balance or
equality
Surplus – an excess of supply over the
demand for a good

5. The Concept of Demand
Demand for a product refers to
the quantity of goods and
services that buyers or
consumers are willing to buy at a
particular place, time and at a
specific price.

6. Elements of Demand
a. quantity – the number of goods
purchased.
b. place – where the goods are bought.
c. time – the period when the goods or
services are bought.
d. price – the amount given in exchange for
goods and services.

7. Example:
Mrs. Flor Wax is scheduled to
make her purchases every
Saturday morning for one week
consumption. She went to NDG
Supermarket to buy beef. Beef
is 250.00 per kilo so Mrs. Flor
Wax bought 5 kilos. What are
the different elements of
demand seen in this situation?

8. Demand Schedule
- The relationship between price and quantity
demanded.
- Is a tabular representation of demand
Option Price
(in hundred pesos)
Quantity
(in hundred kilos)
A 100 25
B 150 15
C 200 10
D 250 5
Hypothetical Market Demand for Beef
Demand Curve
- The graphical representation of demand.

9. The Law of Demand
The quantity of any good which
buyers are ready to purchase varies
inversely with the price of the good
if other price factors are held
constant”

10. Non-Price Factors of Demand
1.Income of the Consumers
2.Size of the Population
3.Prices and Availability of Related
Goods
4.Individual Tastes
5.Special Preferences

11. CONCEPT OF SUPPLY
- is the quantity of goods or commodities that sellers
or producers are willing to sell at a particular time,
place, and for a specific price.
Market Supply of Fish
Option Prices in Pesos Qs in Kilos
A 25 20
B 50 40
C 75 60
D 100 80
E 125 100
F 150 120
Supply Schedule
- The tabular representation of goods available for sale.

12. Law of Supply
“As price rises, the
quantity supplied rises;
as price falls, the
quantity supplied falls”

13. Non-Price Factors of Supply
1.Cost of Production
2.Technological Change
3.Number of Sellers
4.Weather Conditions
5.Government Policy

14. Market Equilibrium
- The state where the
demand and supply of
goods and commodities are
equal.

15. Hypothetical Market Demand & Supply for School Shoes
Price of
Shoes
(in pesos)
Number of
Pairs
Demanded
per Month
Number of
Pairs
Supplied per
Month
100 10 2
200 8 4
300 6 6
400 4 8
500 2 10

16. Surplus – is a condition in the market where the quantity
supplied is more than the quantity demanded.
Shortage – is a condition is the market in which quantity
demanded is higher than supplied.