APPLIED ECONOMICS

Name of Learner: Grade Level:

Section: Date:

LEARNING ACTIVITY SHEET

Demand, Supply and Market Equilibrium

Background Information for Learners
The analysis of supply and demand is a persuasive tool in understanding economic and
business realities, issues, and problems. The idea underlying in the model is the price at
which a product or a resource can bought or sold in various markets which is determined by
the interaction of buyers and sellers who are making choices under the conditions of scarcity.
The Law of Demand states that as the price goes up, the quantity demanded goes down and
vice versa, considering other things is constant (ceteris paribus). Meaning price and quantity
demanded has a negative or inverse relationship.
On the other hand, the Law of Supply states that as the price goes up, quantity supplied goes
up too and as the price goes down, the quantity supplied goes down too, considering other
things are constant (ceteris paribus). Meaning price and quantity supplied has a direct
relationship
Learning Competency with code
Analyze market demand, market supply and market equilibrium (ABM_AE12-Ic-3)

Activity 1 Analysis of Demand

Directions: Below is the demand schedule for hamburgers. Use this demand schedule for
activity 1. and 1.2.
Quantity Demanded
Price (peso per unit) (units per week)
0 100,000
10 90,000
20 80,000
30 70,000
40 60,000
50 50,000
60 40,000
70 30,000
80 20,000
90 10,000
100 0
 1. Graph the movement along the demand curve when the price of hamburgers falls
from P/60 to P/40 per unit. Explain the movement of the demand curve
2. Graph the shifts of the demand curve when buyer would choose to buy 70,000 instead
of 60,000 hamburgers at price P/40. Explain the shift of the demand curve.
3. The law of demand holds that people buy more at lower prices than a higher price.
But some goods are bought largely because they have “snob appeal.” For example,
some students in your school gain prestige by buying expensive brand name items.
Does knowingly buying an item because it is expensive violate the law of demand?
Activity 2. Analysis of Supply
Directions: Below is the supply schedule for hamburgers. Use this supply schedule for
activity 2.1. and 2.2
Price (pesos per unit) Quantity Supplied
(units per week)
0 0
10 10,000
20 20,000
30 30,000
40 40,000
50 50,000
60 60,000
70 70,000
80 80,000
90 90,000
100 100,000

1. Graph the movement along the supply curve when the price of hamburger rises from
P/40 to P/60 per unit. Explain the movement of the supply curve.
2. Graph the shifts of the supply curve when the seller would choose to sell 50,000
instead of 40,000 hamburgers at price P/40. Explain the shift of the supply curve.
3. Many lanzones and rambutan farmers open temporary roadside stands during
harvest season, even though prices are usually low at that time. In this case, as the
price of their product falls, farmers sell more, not less. Is this an exception to the law
of supply?
Activity 3 Market Equilibrium
Directions: Refer to the supply schedule above for the data needed in graphing price
adjustments and market equilibrium.
1. At this price, the quantity demanded is 60,000, which is greater than the quantity
supplied, 40,000. Graph the shortage occurs at any price below the intersection of the
demand and supply curves. Explain the market shortage on the part of the buyer.
 2. At this price, buyers want to purchase 40,000 hamburgers less than the 60,000
hamburgers producers are willing to offer. Graph the market surplus occurs. Explain
the market surplus among the sellers.
Activity 4 Problem and application
Directions: Analyze the situation carefully, explain your answer in not more than five
sentences.
1. What happens to the equilibrium price and the equilibrium quantity of photographic
film if the price of digital cameras decreases and the price of photographic developer
increase while all other things remain constant?

2. Gather news articles on the price of basic commodities including rice, sugar, pork, and
chicken. Make a presentation on what is happening to their prices using demand and
supply analysis.

Rubric
Explanation 4 3 2 1 Points
A complete Good solid Explanation is Misses key
response with a response with unclear points
detailed clear
explanation explanation
Demonstrated Shows Shows Response Response
Knowledge complete substantial shows some shows
understanding understanding understanding complete lack
of the of the of the questions of
questions, questions, ideas understanding
ideas and and process
procedures
Requirements Goes beyond Meet the Hardly meet Does not meet
the requirement requirement the requirement the requirement
of the problem
Reflection:

Write your brief description of your experiences by answering the following questions.
1. What is the most important thing you learned personally?

2. How do you feel that the activity relates to the real-world situations and problems?

3. What are the difficulties you encountered when answering the activities?
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References:
Carnaje, Gideon. Applied Economics, 1253 G. Araneta Avenue, Quezon City, Philippines:
Vibal Group, Inc., 2016
Tullao, Tereso Jr. Applied Economics for a Progressive Philippines, Quezon City,
Philippines: Phoenix Publishing House, Inc., 2016
Viray, Edilberto B.,Jr/ and Jesusa Avila-Bato,Applied Economics, Anvil Publishing,2018