Economics

Demand, Supply and Price
Market
Buyers- households/demanders
Suppliers- producers/firms
Demand-The ability and willingness to buy specific quantities of good at alternate prices in a given time period Or the desire to buy a product, which is backed up by willingness and ability to pay for the it.
• Quantity demanded- the amount of a product that the consumers wish to purchase.
• Demand schedule- a table which shows the quantities of a good, a consumer is willing and able to buy at alternate prices, in a given time period.
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•
•
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• Demand curve- graphical representation of demand schedule. Each point on the demand curve represents a specific quantity that will be demanded at a given price. • Individual demand schedulePrice
0.5
1
1.5
2
2.5
3

Quantity (consumer A)
6
5
4
3
2
1

• Market demand schedule- a table that shows the quantity of commodities that would be demanded by all consumers at given prices.
Price

Quantity
(consumer A)

Quantity
(consumer B)

Market

0.5

6

10

16

1

5

8

13

1.5

ĞŵĂŶĚ ĐƵƌǀĞ ŽĨ ŽŶƐƵŵĞƌ 

DĂƌŬĞƚ ĞŵĂŶĚ ĐƵƌǀĞ

10

4

7

2

2

4

3

ĞŵĂŶĚ ĐƵƌǀĞ ŽĨ ŽŶƐƵŵĞƌ

6

3

2.5

• Market demand curve- is the horizontal sum of the demand curves of all consumers in the market.

4

2

1

0

1

• Law of demand- in a given time period, the quantity demanded of a good increases as its price falls, other things remaining the same(ceteris paribus).
• Qd=f(price)
• Negative relationship
• When price of product rises?
• When price of product falls?
• Change in quantity demanded- is a movement along the demand curve due to price changes, if other factors are held constant.
• Upward movement along the demand curve due to a price riseĺa Ļ in quantity demanded.
• Downward movement along the demand curve due to a price fallĺan Ĺ in quantity demanded.

Change in quantity demanded

WƌŝĐĞ
WϬ



Upward movement along the