All Rights ReservedMicroeconomics © Oxford University Press Malaysia, 2008 2– 1.

Slides:



Advertisements
Similar presentations
Unit 2: Supply, Demand, and Consumer Choice
Advertisements

Supply and Demand The goal of this chapter is to explain how supply and demand really work. What determines the price of a good or service? How does the.
Elasticity If a seller needs to reduce the price of a product, how much should it be reduced? Reduce too little, and projected increase in sales will not.
© OnlineTexts.com p. 1 Chapter 3 Supply and Demand.
Copyright © 2001 by Houghton Mifflin Company. All rights reserved. 1 Economics THIRD EDITION By John B. Taylor Stanford University.
1.The demand curve 2.The supply curve 3.Market equilibrium and disequilibrium 4.Comparative statics 5.Price floors 6.Price ceilings.
M. Jamshed Khan, Dept of Economics, Edwardes College Peshawar 1.
The Basic of Supply and Demand Chapter 2
All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 1.
CHAPTER 4 - DEMAND Chapter Introduction Section 1: What is Demand?
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Market Forces of Supply and Demand u Supply and demand are the two words.
CHAPTER 2 : DEMAND & SUPPLY THEORIES 1. Demand a) Law of dd b) Determinants of dd c) Changes in dd vs changes in qt demanded d) Elasticity of dd : P, cross,
SUPPLY AND DEMAND: HOW MARKETS WORK
Lecture 6 : Examining Market Mechanics  Money prices and relative real prices  Influences on demand  Influences on supply  Prices and quantities determined.
1 © 2010 South-Western, a part of Cengage Learning Chapter 3 Market Demand and Supply Microeconomics for Today Irvin B. Tucker.
Chapter 5: Demand and Supply Supply and Shifters of Supply.
Demand Definitions: Reprise In economics, –A change in quantity demanded occurs when a change in the price of the good itself causes a consumer to buy.
Chapter 3 Supply and Demand: In Introduction. Basic Economic Questions to Answer What: variety and quantity How: technology For whom: distribution.
Chapter 3 Where Prices Come From: The Interaction of Demand and Supply
Chapter 3 & 4 Demand and Supply
Chapter 4 Demand and Supply. The Market can be a location, network of buyers and sellers for a product, demand for a product or a price-determination.
Supply & Demand using them to make decisions. Market… A buyer and seller coming together to exchange goods and services.
THE THEORY OF DEMAND & SUPPLY
Chapter 4 Section 2 Shifts in the Demand Curve. Changes in Demand Ceteris paribus – “all other things held constant” Demand curve is only accurate if.
Chapter 2 Supply and Demand Issues In Economics Today, 4e Guell McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
Demand and Supply Introduction to Economics TM 4-2 Copyright © 1998 Addison Wesley Longman, Inc. Learning Objectives Distinguish between a money price.
Chapter 4: The Market Forces of Supply and Demand 1.
How are Market Outcomes (price and quantity) Determined? The components of the supply and demand model: 1.Supply (description of seller behavior) 2.Demand.
Supply & Demand. Market Economy In a market economy goods and services are made available through supply and demand Consumers decide what is supplied.
Demand and Supply Analysis Trudie Murray © Demand The amount consumers desire to purchase at various prices Demand does not necessarily mean a consumer.
Demand and Supply Demand: The various amounts of a good which people are willing and able to buy at different prices when all other relevant things are.
HOW DEMAND AND SUPPLY OPERATE IN COMPETITIVE MARKETS FOR INDIVIDUAL COMMODITY ? DEMAND SCHEDULE:- There exists a definite relationship between the market.
Eco 6351 Economics for Managers Chapter 3a. Supply and Demand Prof. Vera Adamchik.
Demand and Supply Chapter 3. Demand demand is a schedule that shows the various amounts of a product consumers are WILLING and ABLE to BUY at each specific.
ECONOMICS – I – [1.2] Defining terms – define once per article but refer back Be clearly specific – don’t assume I know etc Simplified models – PPC and.
Chapter 2 Introducing Supply and Demand McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Module Supply and Demand: Introduction and Demand KRUGMAN'S MACROECONOMICS for AP* 5 Margaret Ray and David Anderson.
A market is an institution in which buyers and sellers exchange goods and services for a medium of exchange --money Markets, demand, and supply.
Demand and Supply Krugman Section Modules 5-7. Demand demand is a schedule that shows the various amounts of a product consumers are WILLING and ABLE.
Demand. What is Demand? The quantity of particular goods or services that the market (or consumer) is willing to buy The quantity of particular goods.
SUPPLY & DEMAND. Demand  Demand is the combination of desire, willingness and ability to buy a product. It is how much consumers are willing to purchase.
SUPPLY AND DEMAND (AND GRAPHING APPLICATIONS). SUPPLY AND DEMAND: MODELING A COMPETITIVE MARKET  For a market to be competitive, there has to be several.
Demand Theory Chapter 3. Contents Definition, Representation and Meaning of Demand Tables, graphs and equations Interpretation of equations (Section 3.2)
DEMAND & SUPPLY.
All Rights Reserved PRINCIPLES OF ECONOMICS Third Edition © Oxford Fajar Sdn. Bhd. ( T), – 1.
Demand.  Demand can be defined as the quantity of a particular good or service that consumers are willing and able to purchase at any given time.
SAYRE | MORRIS Seventh Edition Demand and Supply: an Introduction CHAPTER 2 2-1© 2012 McGraw-Hill Ryerson Limited.
UNIT II Markets and Prices. Law of Demand Consumers buy more of a good when its price decreases and less when its price increases.
Unit 3 SUPPLY AND DEMAND. Chapter 4 DEMAND  To have demand for a product you must be WILLING and ABLE to purchase the product  WILLING + ABLE = DEMAND.
Demand A Schedule Showing the Consumers are Willing and Able to Purchase At a Specified Set of Prices During A Specified Period of Time Amounts of a Good.
Demand ES: Make decisions after reflection and review.
UNDERSTAND HOW WE GRAPHICALLY REPRESENT CONSUMERS DEMAND A COMPETITIVE MARKET CONSUMER DEMAND.
Supply & Demand BASICS. Demand & Wants  Wants  Wants = the desire for things with or without purchasing power (the ability to buy)  Demand  Demand.
1 Chapter 3 Market Supply and Demand ©2002 South-Western College Publishing Key Concepts Key Concepts Summary Practice Quiz Internet Exercises Internet.
Lesson # 2 DEMAND. Demand is the effective desire or want for a commodity, which is backed up by the ability (i.e. money or purchasing power) and willingness.
Demand and Supply Chapters 4, 5 and 6. Demand demand is a schedule that shows the various amounts of a product consumers are WILLING and ABLE to BUY at.
Economics Project Q P F.4B Ivy Lam (21) Jenny Leung (23) Jane Li (24) Jessie Wong (34) D S Q1 P1.
DEMAND “How Markets work”. To want or not to want? That is the question! What is Demand? Ferrari F-430 Retail: $ 350,000 Lamborghini Gallardo Retail:
DEMAND. What you write: Demand (D) is the desire, willingness, and ability to buy a good or service Demand is on the consumer’s side What you need to.
Module Supply and Demand: Introduction and Demand 5.
Demand, Supply, and Market Equilibrium
SUPPLY AND DEMAND THEORY (PART 1)
Demand A consumer is said to constitute demand for a product or a commodity if he/she has the ‘willingness’ (i.e. desire) as well as the ‘ability’ (purchasing.
CHAPTER 2 DEMAND AND SUPPLY. CHAPTER 2 DEMAND AND SUPPLY.
Unit One: Supply and Demand.
SUPPLY & DEMAND.
Module 5 Supply and Demand.
Demand and Supply Chapters 4, 5 and 6.
Markets, Demand, and Supply
Chapter 4 Demand and Supply.
Presentation transcript:

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 1

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 2 Demand and Supply 2 CHAPTER

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 3 DEFINITION OF DEMAND Demand is defined as the ability and willingness to buy specific quantities of goods in a given period of time at a particular price, ceteris paribus.

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 4 LAW OF DEMAND Law of demand states that the higher the price of a good, the lower the quantity demanded for that good and lower the price, quantity demanded is higher, ceteris paribus. P Q DD NEGATIVE RELATIONSHIP

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 5 DEMAND SCHEDULE AND DEMAND CURVE PriceQuantity Demand Schedule DD Demand Curve D D

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 6 INDIVIDUAL AND MARKET DEMAND INDIVIDUAL DEMAND The relationship between the quantity of a good demanded by a single individual and its price. MARKET DEMAND The relationship between the total quantity of a good demanded by adding all the quantities demanded by all consumers in the market and its price.

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 7 CHANGE IN QUANTITY DEMANDED CHANGE IN DEMAND DD 1 Movement along the demand curve Price changes and other factors are constant Upward movement: Decrease in quantity demanded (contraction) Downward movement: Increase in quantity demanded (expansion) Shift in the demand curve Occurs when changes in other factors and price remains constant Increase in demand (DD0 DD1 ) Decrease in demand (DD1 DD0 ) DD Quantity Price DD 0 Quantity Price CHANGES IN DEMAND AND QUANTITY DEMANDED

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 8 Festive Seasons and Climate Price of Related Goods Consumers Income Consumers Income Tastes and Fashions Population or Number of Buyers Expectation Advertisement THE DETERMINANTS OF DEMAND

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 9 Exceptional demand is against the Law of Demand where as price increases, demand will also increase and vice versa EMERGENCIES SPECULATION STATUS SYMBOL GODS GIFFEN GOODS EXCEPTIONAL DEMAND

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 10 Derived demand is the demand for a good which is derived from other goods. CROSS DEMAND DERIVED DEMAND INTERRELATED DEMAND The demand for a good is also affected by the price of its substitute or complementary goods. Cross demand can be divided into: joint demand and competitive demand.

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 11 Supply is defined as the ability and willingness to sell or produce a particular product and services in a given period of time at particular price, ceteris paribus. DEFINITION OF SUPPLY

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 12 LAW OF SUPPLY Law of supply states that the higher the price of a good, the greater is the quantity supplied for that good and lower the price, quantity supplied is lower, ceteris paribus. P Q ss POSITIVE RELATIONSHIP

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 13 SUPPLY SCHEDULE AND SUPPLY CURVE PriceQuantity Supply Schedule SupplyCurve SS S S

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 14 INDIVIDUAL AND MARKET SUPPLY INDIVIDUAL SUPPLY The relationship between quantity of a product supplied by a single seller and its price. MARKET SUPPLY The relationship between total quantity of a product supplied by adding all the quantities supplied by all sellers in the market and its price.

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 15 CHANGE IN SUPPLY CHANGE IN QUANTITY SUPPLIED CHANGES IN QUANTITY SUPPLIED AND CHANGE IN SUPPLY Movement along the supply curve Price changes and other factors are constant Downward movement: Decrease in quantity supplied (contraction) Upward movement: Increase in quantity supplied (expansion) Shift in the supply curve Occurs when changes in other factors and price remains constant Increase in supply (SS0 SS1 ) Decrease in supply (SS1 SS0 ) SS Quantity Price SS 1 SS 0 Quantity Price

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 16 Exceptional supply is against the Law of Supply where as price increases, the quantity supplied decreases and vice versa Income Effect (Exceptional Supply Curve) Substitution Effect EXCEPTIONAL SUPPLY Wage Rate Labour

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 17 Price of Related Goods Cost of Production Expectation Technological Advancement Number of Sellers Government Policies THE DETERMINANTS OF SUPPLY

Feedback: Privacy Policy Feedback
Do Not Sell My Personal Information
About project: SlidePlayer Terms of Service

© 2025 SlidePlayer.com. Inc. All rights reserved.