ELEMENTS OF DEMAND AND SUPPLY

Pre-Activity: Interpret. Write your observation using the

table/schedule below.
Table 1 Table 2
Price Quantity
1 100 Price Quantity
2 80 1 20
3 60 2 40
4 40 3 60
5 20 4 80
5 100
Based on my observation that the table want to show to us is when
the price is higher the quantity of the demand decreases. While on
the table 2 show that when the price is lower the quantity of the
demand increases.

Practice 1: A. Find the Demand Function of the given data below.

Find the missing value and show the solutions at the back of this
paper.

Price Quantity Demanded

30 5
25 15
20 25
15 35
10 45
5 55
Solution
b= Q Qd = a - b
P 5 = a - 2(30)
b = 15 - 5 5 = a - 60
25 - 30 5 + 60 = a
b = 10 65 = a
-5
b = -2 or simply 2

Qd = a - b Qd = a - b
Qd = 65 - 2 (20) Qd = 65 - 2 (10)
Qd = 65 - 40 Qd = 65 - 20
Qd = 25 Qd = 45

Qd = a - b Qd = a - b
Qd = 65 - 2 (15) Qd = 65 - 2 (5)
Qd = 65 - 30 Qd = 65 - 10
Qd = 35 Qd = 55
Practice 2: A. Find the Supply Function of the given data below.
Find the missing value and show the solutions at the back of this
paper.

Price Quantity Demanded

30 60
25 50
20 40
15 30
10 20
5 10

Formula Formula
d= Q Qs = c + dP
P
Solutions Solutions
b = 50 - 60 60 = c + 2 (30)
25 - 30 60 = c + 60
b = -10 60 - 60 = c
-5 0=c
b=2

Therefore the value of c is 0.

 Therefore, If the value of a is 65 and b is 2. The demand
function for shoes is Qs = 0 + 2P

Solutions
Qs = c + dP Qs = c + dP
Qs = 0 + 2(5) Qs = 0 + 2(15)
Qs = 0 + 10 Qs = 0 + 30
Qs = 10 Qs = 30

Qs = c + dP Qs = c + dP
Qs = 0 + 2(10) Qs = 0 + 2(20)
Qs = 0 + 20 Qs = 0 + 40
Qs = 20 Qs = 40

Practice 3:
A. Using the demand and supply function you discovered from Practice 1 and 2. Find the
equilibrium Price and Quantity of the given data below and show the solutions at the back
of this paper.

Price Quantity Demanded Quantity Supplied

30 5 60
25 15 50
 Qd = Qs Qd = Qs
65 - 2p = 0 + 2p 65 - 2p = 0 + 2p
65 = 2p + 2p 65 - 2(16.25) = 0 + 2(16.25)
65 = 4p 65 - 32.5 = 0 + 32.5
4 4 32.5 = 32.5
16.25 = p

LEARNING ENHANCEMENT
Task A. REFLECTION # 2
Summarize Chapter 2. Discuss what have you learned from this chapter.

What I have learned from this chapter is to know how to

compute the law of supply and demand specially when it comes to
bussiness here in the Philippines. Rather than that the law of
supply and demand are one of the most important economic rules,
is related in some way to almost all economic concepts. In reality
the willingness of people to supply and demand a good determines
the price of the market equilibrium, or the price where the quantity
of the good that individuals are willing to supply is only equal to the
sum that individuals demand. But at the same time both supply and
demand may be influenced by several factors, allowing them to
increase or decrease in different ways. And that’s what I have
learned from this chapter. Thank you

Task B. Using the hypothetical table below, Complete the table and solve the
following:
a. Demand and Supply Function
b. Equilibrium Quantity and Price
c. Plot the table.

Price per Qd Qs State of Pressure of

ballpen Market Price
5 60 20 -40 upward
Shortage
10 50 30 -20 upward
Shortage
15 40 40 0 equal neutral /
equal

20 30 50 20 surplus downward
25 20 60 40 surplus downward

MARKET EQUILIBRIUM OF DEMAND AND SUPPLY

70
60 SURPLUS
50
40 EQUILIBRIUM

30
20 SHORTAGE
0
1 2 3 4 5
QUANTITY DEMANDED QUANTITY SUPPLIED COLUMN 1
SOLUTIONS FOR TASK B.