Professional Documents
Culture Documents
Applied Economics
Market Demand, Market Supply
and Market Equilibrium
https://www.thoughtco.com/supply-and-demand-practice-questions-1146966
Before starting the module, I want you to set aside other tasks
that may disturb you while enjoying the lessons. Read the simple
instructions below to successfully enjoy the objectives of this kit.
Have fun!
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.
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.
https://www.ducksters.com/money/supply_and_demand.php
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
https://www.nytimes.com/2011/08/07/business/economy/marriage-and-the-law-of-supply-and-
demand.html
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.
Price
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.
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
Qd
Figure 3. The Equilibrium Price
b) How much is the price in the equilibrium point? Present your solution here.
Solution:
Answer:
Sources: https://opentextbc.ca/principlesofeconomics/chapter/3-1-demand-supply-and-equilibrium-in-markets-
for- goods-and-services/
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REMEMBER
What Provison
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________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.
________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‖.
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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.
https://global.oup.com/us/companion.websites/9780199811786/student/chapt2/multiplechoic
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www.kahanasunset.com
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
_______________________________________________________________________.
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E-SITES
To further explore the concept learned today and if it possible to connect the internet,
you may visit the following links:
https://www.slideshare.net/lntrullin/supply-and-demand-1184484
https://www.ducksters.com/money/supply_and_demand.php
REFERENCES
Articles
Amadeo, K. (2020) Elastic Demand: Definition, Formula, Curve, Examples. Retrieved on
Jun 03 2020 from https://www.thebalance.com/elastic-demand- definition-formula-
curve-examples-3305836; https://www.thebalance.com/inelastic-demand- definition-
formula-curve-examples-3305935
Chappelow, J (2019) Law of Supply and Demand. Retrieved on June 03 2020 from
https://www.investopedia.com/terms/l/law-of-supply-demand.asp
Patindol J L (2012)The Law of Supply and Demand . Retrieved on Jun3 03 2020 from
https://www.slideshare.net/shufflejoy000/the-law-of- supply-and-demand
Websites
https://opentextbc.ca/principlesofeconomics/chapter/3-1-demand-supply-and-
equilibrium-in-markets-for-goods-and-services/
https://www.investopedia.com/ask/answers/041615/what-are-some-examples-law-
demand-real-markets.asp
https://www.ducksters.com/money/supply_and_demand_examples.php
https://www.thebalance.com/shift-in-demand-curve-when-price-doesn-t-
matter-3305720
https://www.investopedia.com/ask/answers/012915/what-difference-between-
inelasticity-and-elasticity-
https://www.sparknotes.com/economics/micro/elasticity/problems/
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Acknowledgment
Management Team :
Maria Magdalena M. Lim, Schools Division
Superintendent-Manila
Aida H. Rondilla, Chief Education Supervisor
Lucky S. Carpio, EPS In Charge of LRMDS
Lady Hannah C. Gillo, Librarian II-LRMDS
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https://www.slideshare.net/shufflejoy000/the-law-of- supply-and-demand
17
ANSWER KEY
PRETEST
PART I
A
B. Oversupply/surplus – the
quantity supplied is greater
than the quantity demanded
C. Shortage/scarcity -
The quantity supplied is less
than quantity demanded
PART II
1. The law of demand
2. The law of supply
ACTIVITIES:
Activity 1
1. The law of demand - According to the model above, ―Supply, Demand and
Marriage‖ excess demand for grooms should have caused the terms of
courtship to shift in favor of men. Economics teaches us that when there
is excess demand for a good, its price rises.
2. The law of supply - ―Men with better jobs would receive larger payments.
This can be compared to the supply of product at a given price. ―As the
price of a product increases, companies will produce more of the
product‖.
3. The law of demand – ―the higher the price, the lower the quantity demanded‖
and vice versa
4. The law of supply – ―the higher the price, the higher the quantity supplied’
and vice versa.
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Sources: https://opentextbc.ca/principlesofeconomics/chapter/
3-1-demand-supply-and-equilibrium-in-markets- for- goods-and-services/
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POST TEST
PART I. True or False
1. False 4. True
2. False 5. True
3. True
6. A 9. B
7. B 10.A
8. B
PART III. Answer: No. This is not simply a move along the demand curve. In
December, demand for ―hamon‖ rises, causing the curve to shift to the right.
This allows both the price of ―hamon‖ and the quantity sold of Christmas trees
to rise.
Work Sheet
1. Law of Supply (TRUE)
―a higher price leads to a greater quantity supplied; and a lower price
leads to a lower quantity supplied. Assume that all other variables are
held constant.‖
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