CLIFFORD

MARY GRACE DIETHER DANIELLE DAYE

MERCADO GOZAR MANGUBAT

LARA JEAN
MUJE

JEFFREY
GABIA

1
MARKET
ANALYSIS
 The Market Mechanism

◉ Market- is a mechanism through which

buyers and sellers interact in order to
determine the price and quantity of a
good or a service.
◉ Price- is the value of a good in terms of
money.

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Demand
4
◉ Demand for a product is defined as the
quantity that buyers are willing to buy.
◉ Demand schedule shows the quantity of the
product demanded by a consumer or an
aggregate of consumers at any given price.
◉ Demand function shows how the quantity
demanded of a particular good responds to
price change.

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6
A demand curve is a
graphical representation of
the demand schedule and
therefore contains the
same prices and quantities.

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The Law of Demand
As the prices increases
,the quantity demanded
of the product
decreases, but as price
decreases, the quantity
purchased will increase
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Changes in Quality Demanded
and Movements along the
Demand Curve
◉ Looking back at figure 3, the consumers are willing to
buy 250 kilos of X
When price is at 30. A drop in the price to 5 will attract the
consumers to increase their purchase to 300 kilos. This
movement from point D to point E along the demand curve
is described as a changed in quantity demanded.

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 50

45
PRICE OF X (per kilo in peso) A
40
YOU CAN ALSOB SPLIT YOUR CONTENT
35
C
30 D
25
E
20
F
15

10

0
0 50 100 150 200 250 300 350 400

QUANTITY DEMAND(in kilo)

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 Ceteris Paribus
Assumption
◉ Ceteris Paribus , as ◉ The economic real
defined by J. Bruce
Linderman, is Latin for
“all else being equal”.
world is very complex;
ceteris paribus
simplifies such study by
letting us ignore other
real world details while
we look on specific
factors.
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Factors that also influence the
quantity of demand and supply
◉ 1.income;
◉ 6.taste and preferences
◉ 2.expectation on future
◉ 7. promotion and / or
prices.
advertisement;
◉ 3.prices of related goods
◉ 8. religion
like substitutes and
complements; ◉ 9. customs and traditions
and
◉ 4.size of the population;
◉ 10. fad or fashion.
◉ 5.quality of the product;
◉ The Law of Demand now states ,”Assuming other things
constant, price and quantity demanded are inversely
proportional”

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 Hypothetical Increase in Demand

PRICE OF X INITIAL DEMAND INCREASE IN DEMAND

(per kilo) (d1) (d2)

₱ 45 100 150
40 150 200
35 200 250
30 250 300
25 300 350
20 350 400

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 50

45

40

PRICE OF X ( per kilo in peso) 35

30

25

20
d1
15 d2
10

0
0 100 200 300 400 500 600

QUANTITY DEMANDED(in kilo)

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 The following changes in the non-price factors may
cause the corresponding shift in the demand curve;

increase in income - shift to the right

decrease in income - shift to left
greater taste/preference - shift to the right
less taste/ preference - shift to the left
increase in population - shift ton the right
decrease in population - shift to the left
greater speculation - shift to the right
less speculation - shift to the left
SUPPLY
◉ The supply of a product is defined as
the quantity that sellers are willing to
sell.
◉ The supply schedule
◉ Individual supply schedule
◉ Market supply schedule

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 “
As the price increases the quantity
supplied increases, and as the
price decreases , quantity
supplied decreases.

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CHANGES IN QUANTITY SUPPLIED AND MOVEMENTS
ALONG THE SUPPLY CURVE
50
45
40
35
30
25
20
15
10
5
0
0 50 100 150 200 250
QUANTITY SUPPLIED

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 ◉ Non price determinants that influence the supply
1. Cost of production
2. Availability of economic resources
3. Number of firms in the market ;
4. Technology applied
5. Producer’s goals
6. Taxes and subsidiaries
7. Price of the product; and
8. Price expectation
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◉ The Law of supply now states “ other things assumed as
constant, price and quantity supplied are directly
proportional
 Market Equilibrium
Demand and Supply should eventually be
analyzed as one since the market
operates within the forces of both demand
and supply increase in the number of
sellers in the market and decrease in the
cost of production.

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Changes in Supply and Shifts in the Supply Curve
50 S1 S2
45
40
35
30
25
20
15
10
5
0
0 50 100 150 200 250
QUANTITY SUPPLIED

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◉ British Economist ALFRED MARSHALL had in mind
when he combined the Law of Demand and the Law of
Supply into one Law.

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◉ Increase in the number of sellers - shift to the right
◉ Decrease the number of sellers - shift to the left
◉ Decrease in the cost of production - shift to the right
◉ Goals of the firm - it depends

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 50

45
Excess Supply
40
Equilibrium Point
35

30
Price of x

Excess Demand
25

20

15

10

0
0 50 100 150 200 250 300 350 400 450

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 SUMMARY

Market

Law of demand

Law of Supply

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F ACTORS THAT AFFECT THE LAW OF DEMAND FACTORS THAT AFFECT THE LAW OF SUPPLY

1. Income 1. Cost and production

2.Expectations of future prices 2. Availability of economic resources

3. Prices of related goods like substitutes 3.Number of firms in the market

4. Size of the population 4. Technology applied

5.Quality of the product 5. producer’s goals

6.Taste and preferences 6. Price of the product

7. Promotion and/or advertisements 7. Taxes and subsidiaries

8.Religion 8.Price of the product

9.Customs and traditions 9.Price or expectation

10. Fad and fashion

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