Professional Documents
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Department of Education
Region I
SCHOOLS DIVISION OF ILOCOS
–
NORTE
Applied Economics
Market Demand , Market Supply
and Market Equilibrium
https://www.thoughtco.com/supply-and-demand-practice-questions-1146966
LESSON
3
Market Demand, Market Supply, and
Market Equilibrium
EXPECTATIONS
You will represent real-life situations using the market demand, market
supply and market equilibrium. Specifically, this module will help you to:
Directions: Please analyze the graph and answer the questions below.
Great, you finished answering the questions. You may request your facilitator to check your work.
Congratulations and keep on learning!
Last module, we discussed the issues on the factors of production and how
these affect the economy, the basic problems facing the local and global
economics, and the roles of economics in solving these problems.
Identification. Identify the following problems that may exist in the local and
global economies during production of goods and services. Choose from the
factors below. Just write the letter.
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Learning Module for Business Mathematics
BRIEF INTRODUCTION
In economics, there are terms that you must learn to understand the
better market situations. A demand or the amount of good or service
consumers are willing to purchase at each price. If customers cannot pay for it,
there is no effective demand. Price is what a buyer pays for a unit of the
specific good or service. The total number of units purchased at that price is
called the quantity demanded.
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The law of supply demonstrates the
quantities that will be sold at a given Factors Affecting Supply
price. a) Production capacity,
The higher the price, the higher b) production costs such as
The quantity supplied and labor and materials
Learning Module for Business Mathematics
, vice versa. c) the number of competitors
Producers supply more at a d) Ancillary factors such as
higher price because selling at higher e) material availability,
quantity at a higher pric increases f) weather, and
revenue. g) reliability of supply chains
https://www.ducksters.com/money/supply_and_demand.php
How Do Supply and Demand Create an Equilibrium Price?
The supply curve is a vertical line; overtime, supply curve slopes upward; the
more suppliers expect to be able to charge, the more they will be willing to produce
and bring to market.
In the Equilibrium point, the two slopes will intersect. The market price is
sufficient to induce suppliers to bring to market that same quantity of goods that
consumers will be willing to pay for at that price.
https://www.investopedia.com/terms/l/law-of-supply-demand.asp https://www.thoughtco.com/calculating-economic-equilibrium-
1147698 https://www.ducksters.com/money/supply_and_demand.php
ACTIVITIES
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Learning Module for Business Mathematics
Activity No. 1 “Think, Learn and Challenge Opportunity”
Directions: Let’s analyse this passage. This will help you understand our
new topic on demand, supply and equilibrium. Please read carefully the
passage and answer the question below.
1. Under the dowry system in India, a market with more women seeking
partners, the trade shift favors the men. What law or economic principle is
applicable?
______________________________________________________________________.
_______________________________________________________________________
2. In the same system, men with better jobs receive larger payments. What
economic principle is applicable to this situation? Justify your
answer.________________________________________________________________
_______________________________________________________________________
Directions: Analyse this problem. The following data were taken from an invoice
of Company X. The company imports gasoline from other country.
Qd
Figure 1. Price and Quantity Demanded of Gasoline
Legend: P – Price; D- Demand; Qd –Quantity Demanded
Directions: Analyze the problem. The following are sets of data taken from the
invoice of Company X. The company imports gasoline from other country.
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Learning Module for Business Mathematics
1.00 500 1.20 550 1.40 600
1.60 640 1.80 680 2.00 700
2.20 720
Table 2. Price and Supply of Gasoline
Qd
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Learning Module for Business Mathematics
Qd
b) How much is the price in the equilibrium point? Present your solution here.
Solution:
Answer:
REMEMBER
What Provison
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Learning Module for Business Mathematics
• The law of supply says that a higher price typically leads to a higher
quantity supplied.
• The equilibrium price and equilibrium quantity occur where the supply
and demand curves cross.
• The equilibrium occurs where the quantity demanded is equal to the
quantity supplied.
• If the price is below the equilibrium level, then the quantity demanded
will exceed the quantity supplied.
• Excess demand or a shortage will exist. If the price is above the
equilibrium level, then the quantity supplied will exceed the quantity
demanded.
ASSESSMENT
________1.The upward slope of the supply curve illustrates the law of demand—
―higher price leads to a higher quantity supplied, and vice versa ‖.
________2.The downward slope of the demand curve illustrates the law of
supply—the inverse relationship between prices and quantity demanded.
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Learning Module for Business Mathematics
________3.Time is important to supply because suppliers must react quickly to
a change in demand or price.
________4.A shift in a demand or supply curve occurs when quantity demanded
or supplied changes even though price remains the same.
________5.The law of supply says that ―at higher prices, sellers will supply
more of economic goods‖.
10. If Toyota firm is producing a car faster than people want to buy, there is
a. an excess supply of car and price can be expected to decrease.
b. an excess supply of car and price can be expected to increase.
c. an excess demand of car and price can be expected to decrease.
d. an excess demand and price can be expected to increase.
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Learning Module for Business Mathematics
https://global.oup.com/us/companion.websites/9780199811786/student/chapt2/multiplechoic
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Learning Module for Business Mathematics
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Name_______________________________Year/Section_______________Date__
Teacher____________________________School_____________________________
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