SH1714

Steps in Creating Demand/Supply Curve (Given a Demand/Supply Schedule)

Consider the demand and supply schedules below:

Price per Quantity Demanded Price per Quantity Supplied per
Pizza (₱) per Week (millions) Pizza (₱) Week (millions)
45 8 45 32
30 13 30 28
20 22 20 22
10 46 10 10
To create a demand/supply curve, the following steps are done:
STEP 1. Draw the x-axis (horizontal line) and the y-axis (vertical line) meeting at the lower left
corner of the space for graphing.
STEP 2. Write “0” below the intersection of the x- and y-axes.
STEP 3. From 0, choose a range that will cover the highest quantity in the schedule (for example
for the demand schedule, from 0 to 50), and divide the x-axis at equal increments (for
example, increments of 10), marking each division by a vertical mark. List numbers of
equal increment along the vertical marks from 0 to the highest mark (0, 10, 20, 30, 40,
50).
STEP 4. Do STEP 3 to the y-axis.
STEP 5. Below the x-axis, write the header of the second column for quantity (for example for
the demand schedule, “Quantity Demanded per Week (millions)”).
STEP 6. By the side of the y-axis, write the header of the column for price (for example, “Price
per Pizza (₱)”).
STEP 7. Draw a point at the intersection of each price and quantity listed in your schedule.
STEP 8. Draw a line between each point to complete the curve.
STEP 9. Write the title “Demand Curve for Product/Service” or “Supply Curve for
Product/Service” above the graph (specify the product/service).

Steps in Creating Demand/Supply Schedule (Given a Demand/Supply Curve)

To create a demand/supply curve, the following steps are done:

STEP 1. Create a two-column table with number of rows equal to the number of points on the
curve, plus a row for the header.
STEP 2. Use the title of the y-axis as the header of the first column.
STEP 3. Use the title of the x-axis as the header of the second column.
STEP 4. Project the points on the y-axis and list the projections (from top to bottom of the axis)
on the first column.
STEP 5. Project the points on the x-axis and list the projections on the second column. For
demand, list projections from left to right of the axis. For supply, list projections from
right to left.

03 Handout 1 *Property of STI

Page 1 of 2
 SH1714

Important Formulas:
 𝑄 = 𝑄2 − 𝑄1 (change in quantity supplied or demanded)
 𝑃 = 𝑃2 − 𝑃1 (change in price)
𝑄2−𝑄1
𝑃1×𝑄
 𝑄1
𝑃𝑟𝑖𝑐𝑒 𝑒𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑦 = | 𝑃2−𝑃1 | or 𝑃𝑟𝑖𝑐𝑒 𝑒𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑦 = |𝑄1×𝑃|
𝑃1
The operator | | means absolute value. In taking the absolute value of any number, we
take the positive counterpart of that number. For example, |−1| = 1, |1| = 1. (In simple
words, if the answer is negative, we disregard the sign.)
 𝑌 = 𝑌2 − 𝑌1 (change in income)
𝑄2−𝑄1
𝑌1×𝑄
 𝐼𝑛𝑐𝑜𝑚𝑒 𝑒𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑦 = | 𝑄1
𝑌2−𝑌1 | or 𝐼𝑛𝑐𝑜𝑚𝑒 𝑒𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑦 = |𝑄1×𝑌|
𝑌1
𝑄2𝐴−𝑄1𝐴
𝑃1𝐵×𝑄𝐴
 𝐶𝑟𝑜𝑠𝑠 𝑒𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑦 = | 𝑄1𝐴
𝑃2𝐵−𝑃1𝐵 | or 𝐶𝑟𝑜𝑠𝑠 𝑒𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑦 = |𝑄1𝐴×𝑃𝐵|
𝑃1𝐵
where 𝑄𝐴 = 𝑄2𝐴 − 𝑄1𝐴 (change in quantity demanded for product A) and
𝑃𝐵 = 𝑃2𝐵 − 𝑃1𝐵 (change in price of good B)

References:
Burrow, J. L. & McEachern, W. A. (2017). Applied economics: an introduction. Quezon City, Philippines. Abiva Publishing House,
Inc.
Leaño, R. D. (2016). Applied economics: for senior high school. Manila, Philippines. Mindshapers Co., Inc.

03 Handout 1 *Property of STI

Page 2 of 2