BALANCE OF

SUPPLY AND
DEMAND
CHAPTER 10
REPORTER: SHARMAIYNNE LOU M.
DAMPIL
 Understanding Supply and Demand

Supply and demand are key factors that impact businesses.

Having a basic knowledge of economic theory will allow a
retailer to successfully recognize changes to consumption.
The definitions of supply and demand are quite
straightforward. The Supply is the amount of a good or
service that a supplier is willing or able to produce at a given
price. while Demand is the amount of a good or service that
a consumer is willing or able to purchase at a given price.
 What is Supply and Demand
Balancing?
SUPPLY AND DEMAND BALANCING IS
THE PROCESS OF MAKING PRODUCTS
AVAILABLE AT THE RIGHT PLACE AND
TIME FOR THE CUSTOMER. THIS
BALANCE IS ACHIEVED WHEN THE
SALES RATE (TIME/UNIT OF SALE) FOR
A GIVEN PRODUCT EQUALS THE
THROUGHPUT (TIME/ UNIT
PRODUCTION AND DELIVERY) OF
YOUR SUPPLY.
Market demand is the aggregation of quantities that
customers seek to buy at each market price. Market supply
reflects a summation of the quantities that individual
companies are willing to supply at these same prices. The
intersection of industry demand and supply curves
determines both the equilibrium market price and quantity.
Quantity Demand = Qd = 53,500,000 – 500,000 P (Market Demand)

Or solving the price

€500,000 P - €53,500,000 – Qd
P = €107 - €0.000002Qd

Quantity Supplied = Qs = -15,500,000 + 2,500,000 P (Market Supply)

Or solving the price

€ 500,000 P - €12,500,000 + Qs
P = €5 + €0.000004Qs
Normal profit is a profit metric that takes into consideration
both explicit and implicit costs. It may be viewed in
conjunction with economic profit. Normal profit occurs when
the difference between a company’s total revenue and
combined explicit and implicit costs are equal to zero. This is
the opportunity cost of resources of owner-supplied inputs.