Demand- refers to the number or

amount of goods and services

desired by the consumers at various
prices in a particular period of time.
Determinants of Demand
1.Consumers’ Income
2.Consumers’ Expectation of Future
Prices
3.Prices of Related Products
4.Consumers’ Tastes and Preference
5.Population
Demand Function
Vs.
Demand Schedule
Vs.
Demand Curve
A. Qd= 4,000- 500P
B. Demand Schedule
Points Price (in Millions) Quantity
Demanded
A 0 4,000
B 1 3,500
C 2 3,000
D 3 2,500
E 4 2,000
F 5 1,500
G 6 1,000
H 7 500

c. Demand Curve
Law of DEMAND
Change in Quantity Demanded
vs. Change in Demand
SUPPLY- is defined as the
maximum units/quantity of
goods or services producers
can offer.
Determinants of Supply
1.Change in Technology
2.Cost of Inputs Used
3.Expectation of Future prices
4.Price of Related Products
5.Government Regulation and Taxes
6.Government Subsidies
7.Number of firms in the Market
Supply Function
Vs.
Supply Schedule
Vs.
Supply Curve
A. Qs= -2,000+ 1,000P
B. Supply Schedule
Points Price (in Millions) Quantity
Demanded
A 0 2,000
B 1 1,000
C 2 0
D 3 1,000
E 4 2,000
F 5 3,000
G 6 4,000
H 7 5,000

c. Supply Curve
Change in Quantity Supplied
vs. Change in Supply
Determination of Market Equilibrium

Points Price Qd Qs State of Market Pressure on

(Millions) Price
A 0 4,000 -2,000 SHORTAGE UPWARD
-6,000
B 1 3,500 -1,000 SHORTAGE UPWARD
-4,500
C 2 3,000 0 SHORTAGE UPWARD
-3,000
D 3 2,500 1,000 SHORTAGE UPWARD
-1,500
E 4 2,000 2,000 EQUILIBRIUM UPWARD
0
F 5 1,500 3,000 SURPLUS DOWNWARD
1,500
G 6 1,000 4,000 SURPLUS DOWNWARD
3,000
H 7 500 5,000 SURPLUS DOWNWARD
4,500
Find the Market Equilibrium Price, QD and QS
of the following:
a.4,000-500P= -2,000 + 1,000P
b.4,000 + 1,000= -1,000 + 2,000P
c.6,000- 500P= -2,000 + 1,000P