ECONOMICS

ANALYSIS OF DEMAND AND SUPPLY

-MARKET SYSTEM is a powerful tool for allocation, because the changes in sellers to address
disparities between demand and supply.

DEMAND CURVE

-schedule that shows the used of consumption at alternatives prices at a given point in time.

-demand curve of commodity summarizes the benefits derived by the consumer from the
purchase of good services.

WHAT IS DEMAND CURVE

 1st major action in a market is the consumer, whose primary objective is to purchase
commodity, because it can give him/her benefits.

 In construction of DC, it is important to consider not only the willingness, but also the
capacity to buy.

 Everyone wants to buy, but not liable to buy, because some do not have capacity to buy.

 DC derived from the demand for commodity since it only reflects the relationship
between quantity demands for the price of the commodity.

 price of commodity itself= The only freedom that influences the level of demand of
consumption

SUPPLY CURVE

 Shows the amount of output producing are willing to sell at the alternatives price at a given
point in time.

 Incorporates the sacrifices and cost incurred by the seller in producing commodity.

 Price- payment in purchase of buyer

 The drives from the consumption of the commodity is equals to market price

 price agreed upon in the market – indicator of marginal benefits to the buyer and at the same
time marginal cost to seller

FACTORS AFFECTING DEMAND AND COMMODITY

1. Income
2. Price of other commodities
3. Expectation
4. Taste
5. Market