COLEGIO DE LA PURISIMA CONCEPCION

The School of the Archdiocese of Capiz

Roxas City

College of Business, Management and Accountancy

BA 1 – BASIC MICROECONOMICS
First Semester 2020-2021

Name: LIRA S. BALASABAS

Activity 3
1. Do you think demand for pinoy pandesal and Pinoy tasty is Elastic? What do you
think will happen to the demand for pandesal and tasty when prices increase by
15% and by 100%?

ANSWER: The demand is about the willingness and ability to consume a given
good. Since pandesal is part of the Filipino breakfast and if the price of pandesal and
tasty will increase by 15%, the demand would be considered inelastic. They may still
buy the product but they will lessen the quantity and the demand would still be there.
According to the law of demand, as the price of good decreases, the quantity
demanded of that good increase. While if its increase by 100%, the demand may
become Elastic. Because it would really affect the demand of consumer and it's such
a big jump in its price from what its price before. Generally, demand will change
depending on how high the price is. If the price of goods decreases, the demand
increases. And if the price increases, the demand decreases.

2. What do you think will happen to the supply of pandesal and tasty if the price of
locally milled flour increases by 15% and by 100%?

ANSWER: If the locally milled flour increases by 15%, the supply would just
become smaller or they will just lessen the supply and it won't decrease that
much. Unlike if its increases by 100%, that's the time that supply would decrease
on what quantity supplied before and shortage possibly happen especially when
the demand for pandesal is high. Flour is the main ingredient of Pandesal and
Tasty, once the price of Flours increase its price, Supply would be lessen and it
depends on how big the percentage is.

3. What are the substitutes for pandesal and tasty? Do you think prices of these
substitutes will likewise increase?
 ANSWER: Pandesal and tasty are part of Filipino Breakfast. We have what we
called direct substitute where in we could find other kind of breads which has
lower price. And we also have indirect substitute which we find another option
apart from breads such as Fried rice. But for me, the substitute for pandesal and
tasty is either direct or indirect as long as it satisfy our need as customers. The
price of substitutes will likewise increase if people decided to switch onto those
substitutes, because the demand for those substitutes goods goes up. That’s
mean the price will possibly increase. If the price of one of the products rises,
then demand for substitute goods or good is likely to increase.

4. Do you think the Government should implement a price ceiling for pandesal and
tasty?

ANSWER: For me, if the Government implements a price ceiling and if we are in
suppliers’ side, I think it will be a burden for them and they will suffered, because
they are not just considering the price of the product they are producing, also the
price of raw material that are used to make an output. Once the price of the
ingredients goes up, the price of the goods will also increase. So if Governments
set a price ceiling and producers exceed on that, then the problem will occur. Let
us imagine, if the price of raw materials goes up then the producers follow the
price ceiling, which the price of the products shouldn't exceed from the limit and
considering the high demand of customers. Producers will suffered from shortage
which they can't meet the demand of the customers. Because the supply will be
lessen if the prices of raw materials used increases.