University of Benghazi

Faculty of IT
Software Engineering Department

Engineering ‫االقتصاد‬
Economics ‫الهندسي‬
Course Instructor
MOHAMED ELORFI
 Engineering
Economics

PART 3

Supply and Demand

‫العرض والطلب‬
 Demand‫لطلب‬00‫ا‬
 Demand refers to how much (quantity) of a product or
service is desired by buyers.
.‫ة يرغب المشتري‬6‫ة أو الخدم‬6‫ كم من السلع‬
 The quantity demanded is the amount of a product
people are willing to buy at a certain price.
‫ هي الكم من السلعة الذي يرغب الناس شراءه بسعر‬:‫ الكمية المطلوبة‬
.‫معين‬
 The relationship between price and quantity demanded
is known as the demand relationship.
.)‫ العالقة بين السعر والكمية المطلوبة تسمى (عالقة الطلب‬

Mohamed Elorfi : Engineering Economics 3

 Supply‫رض‬0‫لع‬00‫ا‬
 Supply represents how much the market can offer.
.‫ العرض يمثل الكمية التي يستطيع السوق توفيرها‬
 The quantity supplied refers to the amount of a certain
good producers are willing to supply when receiving a
certain price.
‫ تشير إلى الكم من السلعة الذي يرغب المنتجين عرضه عند‬:‫ الكمية المعروضة‬
.‫الحصول على سعر معين‬
 The correlation between price and how much of a good or
service is supplied to the market is known as the supply
relationship.
)‫ االرتباط بين السعر والكمية المعروضة للسوق يسمى (عالقة العرض‬
 Price, therefore, is a reflection of supply and demand.
.‫ وهنا نقول أن السعر هو المحدد لعملية العرض والطلب‬
Mohamed Elorfi : Engineering Economics 4
 The Law of Demand‫لطلب‬00‫انونا‬00‫ق‬
The law of demand states that, if all other factors remain
equal, the higher the price of a good, the less people will
demand that good. In other words, the higher the price, the
lower the quantity demanded. The amount of a good that
buyers purchase at a higher price is less because as the
price of a good goes up, so does the opportunity cost of
buying that good.
‫عر‬6‫ا زاد س‬6‫ه كلم‬6‫ فان‬،‫ة‬6‫ل ثابت‬6‫ل العوام‬6‫ت ك‬6‫ إذا بقي‬،‫ه‬6‫ى أن‬6‫ص عل‬6‫ب ين‬6‫قانون الطل‬
‫ة‬6‫ كمي‬.‫ة المطلوبة‬6‫ة الكمي‬6‫عر قل‬6‫ع الس‬6‫ا ارتف‬6‫ي كلم‬6‫ أ‬.‫ب الناس لها‬6‫ل طل‬6‫لعة ق‬6‫الس‬
‫عر‬6‫ع س‬6‫ا ارتف‬6‫ه كلم‬6‫ل ألن‬6‫ي تكون أق‬6‫عر عال‬6‫ا المشتري بس‬6‫ي يشتريه‬6‫لعة الت‬6‫الس‬
.‫السلعة كلما قلة فرصة شراء السلعة‬

Mohamed Elorfi : Engineering Economics 5

 The Law of Demand‫لطلب‬00‫انونا‬00‫ق‬

A, B and C are points on the demand curve. Each point on the curve reflects a
direct correlation between quantity demanded (Q) and price (P). So, at point A,
the quantity demanded will be Q1 and the price will be P1, and so on. The
demand relationship curve illustrates the negative relationship between price and
quantity demanded. The higher the price of a good the lower the quantity
demanded (A), and the lower the price, the more the good will be in demand (C).
Mohamed Elorfi : Engineering Economics 6
 The Law of Supply‫رض‬0‫لع‬00‫انونا‬00‫ق‬
Like the law of demand, the law of supply demonstrates
the quantities that will be sold at a certain price. But unlike
the law of demand, the supply relationship shows an
upward slope. This means that the higher the price, the
higher the quantity supplied. Producers supply more at a
higher price because selling a higher quantity at a higher
price increases revenue.
‫عر‬6‫ت س‬6‫تباع تح‬6‫ي س‬6‫تعرض الكميات الت‬6‫ قانون العرض يس‬،‫ب‬6‫ل قانون الطل‬6‫مث‬
‫ وهذا‬.‫ل مرتفع‬66‫ر مي‬66‫ة العرض تظه‬66‫ عالق‬،‫ب‬66‫ن بخالف قانون الطل‬66‫ ولك‬.‫معين‬
‫ر‬6‫ن يعرضون أكث‬6‫ المنتجي‬.‫ة المعروضة‬6‫ت الكمي‬6‫عر ارتفع‬6‫ع الس‬6‫ا ارتف‬6‫ كلم‬،‫ي‬6‫يعن‬
.‫ وذلك الن بيع كمية كبيرة بسعر مرتفع يزيد الدخل‬،‫إذا زاد السعر‬

Mohamed Elorfi : Engineering Economics 7

 The Law of Supply‫رض‬0‫لع‬00‫انونا‬00‫ق‬

A, B and C are points on the supply curve. Each point on the curve reflects a
direct correlation between quantity supplied (Q) and price (P). At point B, the
quantity supplied will be Q2 and the price will be P2, and so on.

Mohamed Elorfi : Engineering Economics 8

 Equilibrium‫لتوازن‬00‫ا‬
When supply and demand are equal (i.e. when the supply function
and demand function intersect) the economy is said to be at
equilibrium. At this point, the allocation of goods is at its most
efficient because the amount of goods being supplied is exactly the
same as the amount of goods being demanded. Thus, everyone
(individuals, firms, or countries) is satisfied with the current
economic condition. At the given price, suppliers are selling all the
goods that they have produced and consumers are getting all the
goods that they are demanding.
‫لع‬6‫ة تكون الس‬6‫د هذه النقط‬6‫ عن‬.‫اد متوازن‬6‫ن االقتص‬6‫ب يقال أ‬6‫اوى العرض والطل‬6‫ا يتس‬6‫عندم‬
،‫ لهذا‬.‫في أكفأ وضع وذلك الن الكمية المعروضة من السلعة هي بالضبط الكمية المطلوبة‬
‫ي‬6‫لع الت‬6‫ل الس‬6‫بيعون ك‬6‫لع ي‬6‫ن للس‬6‫ المزودي‬.‫اد الحالي‬6‫ع االقتص‬6‫ن وض‬6‫ي ع‬6‫ل يكون راض‬6‫الك‬
.‫ي يطلبونها‬666666‫لع الت‬666666‫ل الس‬666666‫ى ك‬666666‫لون عل‬666666‫تهلكين يحص‬666666‫ا والمس‬666666‫ينتجونه‬

Mohamed Elorfi : Engineering Economics 9

 Equilibrium

As you can see on the chart, equilibrium occurs at the intersection of the demand
and supply curve, which indicates no allocative inefficiency. At this point, the
price of the goods will be P* and the quantity will be Q*. These figures are
referred to as equilibrium price and quantity.
In the real market place equilibrium can only ever be reached in theory, so the
prices of goods and services are constantly changing in relation to fluctuations in
demand and supply.
Mohamed Elorfi : Engineering Economics 10
 Disequilibrium‫لتوازن‬00‫ ا‬0‫عدم‬

Disequilibrium occurs whenever the price or

.*quantity is not equal to P* or Q

‫ أو الكمية ال يساوي سعر‬6‫عدم التوازن يحدث كلما كان السعر‬

.‫أو كمية التوازن‬

Mohamed Elorfi : Engineering Economics 11

 Excess Supply‫ئد‬0‫لزا‬00‫رضا‬0‫لع‬00‫ا‬
If the price is set too high, excess supply will be created within the economy and there
will be allocative inefficiency.
.‫إذا وضع سعر عالي ينتج عنه عرض زائد ضمن االقتصاد وذلك سوف يحدث عدم كفاءة في التوزيع‬

At price P1 the quantity of goods that the producers wish to supply is indicated by Q2.
At P1, however, the quantity that the consumers want to consume is at Q1, a quantity
much less than Q2. Because Q2 is greater than Q1, too much is being produced and too
little is being consumed. The suppliers are trying to produce more goods, which they
hope to sell to increase profits, but those consuming the goods will find the product less
attractive and purchase less because the price is too high.
Mohamed Elorfi : Engineering Economics 12
 Excess Demand‫ئد‬0‫لزا‬00‫لطلبا‬00‫ا‬
Excess demand is created when price is set below the equilibrium price. Because the
price is so low, too many consumers want the good while producers are not making
enough of it.
‫ إلى زيادة الطلب‬6‫ وذلك الن السعر المنخفض يؤدي‬.‫الطلب الزائد يحدث عندما يوضع سعر تحت سعر التوازن‬
.‫على السلعة بينما مزودي هذه السلعة ال ينتجون ما يكفي منها‬

In this situation, at price P1, the quantity of goods demanded by consumers at this price
is Q2. Conversely, the quantity of goods that producers are willing to produce at this
price is Q1. Thus, there are too few goods being produced to satisfy the wants
(demand) of the consumers. However, as consumers have to compete with one other to
buy the good at this price, the demand will push the price up, making suppliers want to
supply more and bringing the price closer to its equilibrium.
Mohamed Elorfi : Engineering Economics 13