ERICHJANE C.

PIOQUINTO

FA1-G12-03-GAS-CRIM ABM 007

THE LAW OF SUPPLY AND DEMAND

Situations Effect to Price Market Conditions

S>D Decrease Surplus

D>S Increase Shortage
S=D Constant Equilibrium

Scenario 1:

The mango is a seasonal fruit. The scenario for Cali is to supply mangoes, but the
problem is that mangoes have a peak season that only runs from March to June, and
the stock she has is only 30 kilos as a result of the increased price. From the season
comes the abundance of the harvest. She wanted to stock 60 kilos of mangoes, so
this comes at a low price.

SUPPLY SCHEDULE (S>D)

SUPPLY FOR MANGOES PRICE

60 115
55 120
50 130

45 135
30 145
 Supply Chart
160

140

120

100

80

60

40

20

0
30 45 50 55 60

You may notice the direction of the supply graph is that it is opposite to the demand
schedule because the supply is first to be high and the demand is very low. If the
supply tends to be lower, the prices change to increase.

Scenario 2:

Onion is well-known to be short on stock in December. From the scenario of Vez,

Vez is in demand at 60 kilos at a price of 100 pesos during the summer season, but
when the season is reached every month, there is heavy rainfall. The onions are not
in harvest, and it is possible to be swayed by the flood. So the demand for its onions
is less. As the rainy season approaches, the stocks are in shortage as a result. This
is resulting in a shortage of 30 kilos, so the price comes at very high price, which is
600 pesos.

DEMAND SCHEDULE (D>S)

PRICE DEMAND FOR ONIONS

600 30

400 40
200 50
150 55

100 60
 Demand Chart
700

600

500

400

300

200

100

0
30 40 50 55 60

You may notice the graph of the demand starts at high and the supply is very low.
Once the supply increase, you can see from the graph, the prices change to
decrease.

Scenario 3:

The Ballpen is always constant in price times of selling it the month to be back at
school after summer. The scenario of Joseph and Jay is that Joseph owns a store
that supplies every need of a student. The Ballpen is worth 25, Cali wants to buy 50
Ballpens to make it sell for its students since it is very well-known to buy it because
of school, so Joseph makes it 50 to give him. The supply and demand results are
fixed. As it is constant, both will not be affected.

CONSTANT SCHEDULE (S = D)

Price SUPPLY FOR SUPPLY FOR

BALLPENS BALLPENS
25 50 50
 Constant Chart
30

25

20

15

10

0
50 50