SHS

Applied Economics
Quarter 1: Module 3
MARKET DEMAND , MARKET
SUPPLY, AND MARKET
EQUILIBRIUM
Applied Economics
Quarter 1 – Week 3
Module 3: MARKET DEMAND, MARKET SUPPLY, AND MARKET EQUILIBRIUM

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the Government of the Philippines. However, prior approval of the government
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represent nor claim ownership over them.

Regional Director: Gilbert T. Sadsad

Assistant Regional Director: Jessie L. Amin

Development Team of the Module

Writer: MARY GRACE I. PETRONIO, Nabua NHS, Camarines Sur

Language Editor: RACHELLE A. ESGUERRA, Camaligan NHS, Camarines Sur
Name Editors: RACHELLE A. ESGUERRA, Camaligan NHS, Camarines Sur
ROSA S. REGISTRADO, Nabua NHS, Camarines Sur
Name Reviewer: FRANCIS HASSEL N. PEDIDO, Pamplona NHS, Camarines Sur
Name Illustrator: ABEGAEL S. ARINDAENG, Dalipay HS, Camarines Sur
EVAN LEE P. LEONEM, Milaor CS, Camarines Sur
ALVIN G. ALEJANDRO, San Ysiro ES, Antipolo City
Name Layout Artist: ABEGAEL S. ARINDAENG, Dalipay HS, Camarines Sur
Final Validator: MICHAEL ALLAN N. ORTUA, Canayonan National High School
MARIBEN D. BERJA, SDO Camarines Sur
 Our day to day needs as well as the things that
are unexpectedly happening in our country
correspondingly affect our economy. In this module, we
are going to learn how these needs changes the demand
and supply for a certain product and basically why there is
equilibrium.
Demand is the quantity of a good that consumers
are willing and able to purchase at various prices during a
given period of time.
Supply is the total amount of a product (good or
service) available for purchase at any specified price.
Market equilibrium is an economic state when the
demand and supply curves intersect and suppliers
produce the exact amount of goods and services of which
consumers are willing and able to consume. This is the
point where quantity demanded and quantity supplied is equal at a given time and
price. There is no surplus or shortage in this situation and the market would be
considered stable. In other words, consumers are willing and able to purchase all of
the products that suppliers are willing and able to produce.

MOST ESSENTIAL LEARNING COMPETENCY:

Market Demand, Market Supply, and Market Equilibrium

At the end of the module, you should be able to:

1. Define Demand, Supply, and Equilibrium.

2. Explain the law of demand, supply and how equilibrium
price and quantity are determined.
3. Create a situational example and illustrate the Law of
Demand and Supply.

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Are you ready to start learning?

1. Demand is the quantity of a good that consumers are willing and

able to purchase at various prices during a given period of time.
2. Demand Curve is a graphical representation showing the
relationship between the prices and quantities demanded per
time period.
3. Equilibrium is an economic state when the demand and supply
curves intersect and suppliers produce the exact amount of
goods and services consumers are willing and able to consume.
4. Law of Demand states that, "conditional on all else being equal,
as the price of a good increases (↑), quantity demanded
decreases (↓); conversely, as the price of a good decreases (↓),
quantity demanded increases (↑)". In other words, the law of
demand describes an inverse relationship between price and
quantity demanded of a good. Alternatively, other things being
constant, quantity demanded of a commodity is inversely related
to the price of the commodity.
5. Law of Supply is a law that states that, all other factors being
equal, as the price of a good or service increases, the quantity of
goods or services that suppliers offer will increase, and vice
versa.
6. Market is a place where two parties can gather to facilitate the
exchange of goods and services. The parties involved are
usually buyers and sellers. The market may be physical like a
retail outlet, where people meet face-to-face, or virtually like an
online market, where there is no direct physical contact between
buyers and sellers.
7. Price is the sum or amount of money or its equivalent for which
anything is bought, sold, or offered for sale at any given period of
time.
8. Quantity demanded is a term used in economics to describe the
total amount of a good or service that
9. Supply Curve is a graphical representation showing the
relationship between the price of the product sold or the
factor of production.
10. Supply is the total amount of a product (good or service)
available for purchase at any specified price.
1. consumers demand over a given interval of time.
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DIRECTION: Read the questions carefully and choose the correct answer. Write
your answer in a separate sheet of paper.

1. The definition that BEST describe a market?

A. It involves usually buyers and sellers.
B. It can be physical like a retail outlet, where people meet face-to-face, or
virtual like an online market, where there is no direct physical contact
between buyers and sellers.
C. A place where two parties can gather to facilitate the exchange of goods
and services.
D. All of the above

2. Demand is the quantity of a good that _____________are willing and able to

purchase at various prices during a given period of time.
A. Consumers B. Sellers
C. Both Consumers and Sellers D. None of the above

3. Supply is the total amount of a product (good or service) available for _______at
any specified price.
A. Consume B. Purchase
C. Consume and Purchase D. All of the above

4. Supply Curve is a graphical representation showing the relationships of what

variable?
A. Price and Quantity of a product B. Price and Equilibrium
C. Price and Factors of Production D. All of the above

5. Demand Curve is a graphical representation showing the relationship of what

variable?
A. Price and Quantity of a product B. Price and Equilibrium
C. Price and Factors of Production D. All of the above

6. It states that, as the price of a good increases (↑), quantity demanded decreases
(↓); conversely, as the price of a good decreases (↓), quantity demanded
increases (↑)".
A. Law of Supply B. Law of Demand
C. Equilibrium D. Disequilibrium

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7. It is an economic state when the demand and supply curves intersect and
suppliers produce the exact amount of goods and services consumers are
willing and able to consume.
A. Law of Supply B. Law of Demand
C. Equilibrium D. Disequilibrium

8. When the price of a particular commodity go up what will happen to the demand
for that particular product?
A. Demand will increase B. Demand will decreases
C. Demand will be average D. Demand will be zero

9. Applying the law of supply, at what price does the seller wanted to sell more
products?
A. When the price is higher B. When the price is lower
C. When the price is at average D. When the price is too low

10. Applying the law of demand, at what price does the buyer are willing to buy a
product?
A. When the price is higher B. When the price is lower
C. When the price is at average D. When the price is too low

LET’S CHECK THE RESULT

RATING LEVEL AND DESCRIPTION

10 – 8 Points EXCELLENT!
Congratulations! You can proceed to the next page
and continue to learn the lesson.
7 – 5 Points BETTER!
You can go back to those lessons that you’ve
missed and continue
4 – 3 Points VERY GOOD!
You can improve your knowledge and continue to
learn the next lesson.
0 – 2 Points NEEDS IMPROVEMENT!
This module will help you to learn better with the
new lesson. You can do it. Let’s open the next page.

4
Can you still remember our previous lesson? Let’s see! Can you try this?

TASK NO.1 MATCHING GALORE!

DIRECTION: Your task is to match the following topics previously discussed in
Column A and connect it to the topics in Column B. Write down the pairs you have
chosen in your answer sheet and briefly explain their relationship.
Column A Column B
(Basic Economic Questions) (Economic Utility)

For whom to produce? Time

How much to produce? Place

What to produce? Form

How to produce? Possession

No. Paired Topics Brief Explanation

1.

2.

3.

4.

TASK NO.2: WHAT IS MORE IMPORTANT?

DIRECTION: During the time of pandemic, all of us worry about our health and
safety. We adopted some precautionary measures in order to avoid
from being infected. Aside from that, we worry also what we are going
to eat since most of us were not able to go to work and we are not
able to do other things which deemed to be important during that time.

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 Your task is to list down at least 10 items or
products by categorizing it from most needed to the least
one. Write your answers in a separate sheet of paper.

No. Products
1
2
3
4
5
6
7
8
9
10

Are you ready to share your work? Let us compare it with one another!
What product is more important during pandemic? Some students wrote food.
Yes! It is important. Most of us need food like rice and other basic commodities.
What will happen to the supply of those particular commodities? The supply for those
commodities will be lesser or worst will have a shortage since the demand for it is
higher. Some student wrote dress, shoes, cellphone etc… Do you think we need a
new phone during this time of pandemic?

Great! You can start now ……GOODLUCK!

TASK NO.3: Remember this!
A market is a place where two parties can gather to facilitate the
exchange of goods and services. The parties involved are usually buyers and
sellers. The market may be physical like a retail outlet, where people meet
face-to-face, or virtually like an online market, where there is no direct physical
contact between buyers and sellers.
Demand is an economic principle referring to a consumer's desire to
purchase goods and services and willingness to pay a price for a specific good
or service.
The Law of Demand states that other factors being constant (ceteris
paribus), price and quantity demand of any good and service are inversely
related to each other. When the price of a product increases, the demand for
the same product decreases.
Supply on the other hand, is the total amount of a product (good or service)

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available for purchase at any specified price.
Law of Supply states that other factors remaining constant, price and quantity
supplied of a good are directly related to each other. In other words, when the price
paid by buyers for a good rise, then suppliers increase the supply of that good in the
market.
Market equilibrium is an economic state when the demand and supply curves
intersect and suppliers produce the exact amount of goods and services consumers
are willing and able to consume essentially, this is the point where quantity
demanded and quantity supplied is equal at a given time and price.
There is no surplus or shortage in this situation and the market would be
considered stable. In other words, consumers are willing and able to purchase all of
the products that suppliers are willing and able to produce.

TASK NO.4: STAY AT HOME!

DIRECTION: During the time of pandemic, people are not allowed to go out.
However, we wanted to enjoy and still experience the things that we
normally do even at home. There are products that we normally buy
and still available and there are products which are not anymore
available. Your task is to write down the demand and supply for the
following products. Indicate whether the demand/supply is high or low
in a separate sheet of paper.

Product Demand Supply

Source:
https://www.bing.com/images/search?q
=inflatable+pool&FORM=HDRSC2
2
Source:
https://www.bin
g.com/images/s
earch?view=det
ailV2
milk+tea&simid

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 3 Source:
https://www.b
ing.com/imag
es/search?vi
ew=detailV

Source:
https://www.bing.com/images/search?Acc
essoriesFORM=HDRSC2

Source:
https://www.bing.com/images/search?q=facial
mask&FORM=HDRSC2

TASK NO. 5: LET US ANALYZE!

DIRECTION: Your task is to explain the implication of the following data below
applying the concept of Demand, Supply and Equilibrium. Write your
answers in a separate sheet of paper.
Price of mangoes Quantity Demanded for
(per Kg) mangoes per week (in
Kg)
80 0.5

70 1

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 60 1.5

50 2

40 2.5

30 3
Answer:

___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________

Price of mangoes Quantity Supply

(per Kg) of mangoes per week (in
Kg)
80 3
70 2.5
60 2
50 1.5
40 1
30 0.5

Answer:
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________

Price of Quantity Quantity Supply

mangoes Demanded for of mangoes per
(per Kg) mangoes per week (in Kg)
week (in Kg)
80 0.5 3
70 1 2.5
60 1.5 2
50 2 1.5
40 2.5 1
30 3 0.5

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Answer:
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________

TASK NO. 6: LET’S DO THE GRAPHING!

DIRECTION: Your task is to graph the given data above (task no.5). Write your
answers in a separate sheet of paper.

1. Market Demand 2. Market Supply 3. Market Equilibrium

P P P

QD QS Q

What have you learned so far?

1. A market is a place where two parties can gather to

facilitate the exchange of goods and services. The
parties involved are usually buyers and sellers.
2. In a market, buyers make the demand which is their
desire to purchase goods and services and willingness
to pay a price for a specific good or service and sellers
supply the necessary goods/commodities that the
buyers demanded for at a given price.
3. As a result of transaction between the buyer and the
seller, the point where quantity demanded and quantity
supplied is equal at a given time and price where
equilibrium happens.
4. The law of demand states that the as the price of a
product increases, the demand for the same product
will decreases.
5. Law of supply states that as the price of the product
increases, supplier will be more willing to supply goods
or services in the market.
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TASK NO. 7: CAN YOU ILLUSTRATE?
DIRECTION: Your task is to create a situational example and illustrate how you
understand the Law of Demand and The Law of Supply. Write your answer in
separate sheet of paper.

Situational Example of Law of Demand Situational Example of Law of

_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
Supply
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________

Illustration of the Law of Demand

Illustration of the Law of Supply

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 POST TEST

DIRECTION: Read the questions carefully and choose the correct answer. Write
your answer in a separate sheet of paper.

1. Applying the law of demand, at what price does the buyer are willing to buy a
product?
A. When the price is higher B. When the price is lower
C. When the price is at average D. When the price is too low

2. Applying the law of supply, at what price does the seller wanted to sell more
products?
A. When the price is higher B. When the price is lower
C. When the price is at average D. When the price is too low

3. When the price of a particular commodity goes up what will happen to the demand
for that particular product?
A. Demand will increase B. Demand will decreases
C. Demand will be average D. Demand will be zero

4. It is an economic state when the demand and supply curves intersect and
suppliers produce the exact amount of goods and services consumers are
willing and able to consume.
A. Law of Supply B. Law of Demand
C. Equilibrium D. Disequilibrium

5. It states that, as the price of a good increases (↑), quantity demanded decreases
(↓); conversely, as the price of a good decreases (↓), quantity demanded
increases (↑)".
A. Law of Supply B. Law of Demand
C. Equilibrium D. Disequilibrium

6. Demand Curve is a graphical representation showing the relationship of what

variable?
A. Price and Quantity of a product B. Price and Equilibrium
C. Price and Factors of Production D. All of the above

7. Supply Curve is a graphical representation showing the relationships of what

variable?
A. Price and Quantity of a product B. Price and Equilibrium
C. Price and Factors of Production D. All of the above

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8. Supply is the total amount of a product (good or service) available for _______at
any specified price.
A. Consume B. Purchase
C. Consume and Purchase D. All of the above

9. Demand is the quantity of a good that _____________are willing and able to

purchase at various prices during a given period of time.
A. Consumers B. Sellers
C. Both Consumers and Sellers D. None of the above

10.The definition that BEST describe a market is __________?

A. It involves usually buyers and sellers.
B. It can be physical like a retail outlet, where people meet face-to-face, or
virtual like an online market, where there is no direct physical contact
between buyers and sellers.
C. A place where two parties can gather to facilitate the exchange of goods
and services.
D. All of the above

LET’S CHECK THE RESULT

RATING LEVEL AND DESCRIPTION

10 – 8 Points EXCELLENT!
Congratulations! You can proceed to the next page
and continue to learn the lesson.

7 – 5 Points BETTER!
You can go back to those lessons that you’ve
missed and continue

4 – 3 Points VERY GOOD!

You can improve your knowledge and continue to
learn the next lesson.

0 – 2 Points NEEDS IMPROVEMENT!

This module will help you to learn better with the
new lesson. You can do it. Let’s open the next
page.

13
TASK NO. 8: IS THERE ANY CHANGES?
DIRECTION: Your task is to ask in any grocery, supermarket or market near you
about the corresponding prices of the following items from three
consecutive years. Write your answers in a separate sheet of paper.

Products/Items Year 2018 Year 2019 Year 2020

Alcohol
Tablet
Rice
Meat
Laptop

PRE-TEST POST-TEST
1. D 6. B 1. B 6. A
2. A 7. C 2. A 7. C
3. B 8. B 3. B 8. B
4. C 9. A 4. C 9. A
5. A 10. B 5. B 10. D

TASK NO. 1. Matching Galore! – Answer may vary.

TASK NO.2: “What is more important”– Answer may vary.
TASK NO.3: Remember this?
TASK NO.4: Stay At Home! - Answer may vary.
TASK NO. 5: Point this out! - Answer may vary.
TASK NO. 6: Let’s do the graphing! - Answer may vary.
TASK NO. 7: Can you illustrate? – Answer may vary.
TASK NO. 8: Is there any changes? - Answer may vary.

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BOOKS:

Ediberto B. Viray Jr. and Jesusa Avila – Bato (2018), Applied Economics for Senior
High School, Anvil Publishing Inc. 2018, pages 32 - 65.

Eloisa M. Macalinao, Applied Economics, Unlimited Books Library Services and

Publishing Inc. 2016, pages 24, 25, 30, 31, 32. .

ARTICLES:

“Demand Definition and concept”’ Retrieved June 20, 2020, from

https://en.wikipedia.org/wiki/Demand

“ Supply Definition and concept”’ Retrieved June 21, 2020, from

http://www.businessdictionary.com/definition/supply.html

“Market Equilibrium Definition”’ Retrieved June 21, 2020, from

https://www.myaccountingcourse.com/accounting-dictionary/market-equilibrium

“ Law of Demand Definition”’ Retrieved June 22, 2020, from

https://en.wikipedia.org/wiki/Law_of_demand

“ Law of supply definition”’ Retrieved June 22, 2020, from

https://www.investopedia.com/terms/l/lawofsupply.asp

“ Market Definition”, Retrieved June 23, 2020, from

https://www.investopedia.com/terms/m/market.asp

“ Definition of Demand”, Retrieved June 23, 2020, from

https://www.investopedia.com/terms/d/demand.asp

“Law of Demand Definition and Concept”, Retrieved June 24, 2020, from
https://economictimes.indiatimes.com/definition/law-of-demand

“ Law of Supply Definition and Concept”, Retrieved June 24, 2020, from
http://www.businessdictionary.com/definition/supply.html

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“ Law of Supply Definition and Concept”, Retrieved June 24, 2020, from
https://economictimes.indiatimes.com/definition/law-of-supply

“ Equilibrium Definition and concept”, Retrieved June 25, 2020, from

https://en.wikipedia.org/wiki/Economic_equilibrium

PICTURES:

Cover picture
https://www.bing.com/images/search?q=Supply+Demand+Balance&FORM=IRIBE

Inflatable Pool
https://www.bing.com/images/search?q=inflatable+pool&FORM=HDRSC2

Milk tea
https://www.bing.com/images/search?view=detailV2&ccid=RY4Ydedb&id=FCD00F8
59EB0194AFD8F48072F5AF8128900B3F7&thid=OIP.RY4Ydedb_bVZNhvfZrHGAQ
AAAA&mediaurl=https%3a%2f%2fupload.wikimedia.org%2fwikipedia%2fcommons%
2fa%2fa2%2fBubble_Tea.png&exph=812&expw=434&q=milk+tea&simid=60800425
0283741058&ck=4A0A81FCD948FBDAE8F311A3324B1055&selectedIndex=5&ajax
hist=0

Alcohol picture
https://www.bing.com/images/search?view=detailV2&ccid=slBHSmr3&id=28C59ECF
64BF1C9E59645954CCEEE8A00FA22B3D&thid=OIP.slBHSmr3_1ttJrWZlTc6BgHa
O2&mediaurl=https%3A%2F%2Fs-media-cache-
ak0.pinimg.com%2F564x%2F2e%2F57%2Fc8%2F2e57c8d90fc280e7e4ae1b16e07
3a7d5.jpg&exph=1027&expw=512&q=rubbing+alcohol+hand+sanitizer&simid=6080
31686623691340&ck=774777D767E289AE68AEF6739A3213E4&selectedindex=61
&ajaxhist=0&vt=0&eim=1,6&sim=11

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