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Assignmentt - Mendoza Demand and Supply

ASSIGNMENT

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11 views3 pages

Assignmentt - Mendoza Demand and Supply

ASSIGNMENT

Uploaded by

Mendz Mendoza
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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GEE 003-EE42S1 - General Education

Elective 3

Assignment

CONCEPTS AND PRINCIPLES OF


DEMAND AND SUPPLY ANALYSIS

“I affirm that I have not given or received any unauthorized


help on this assignment and that this work is my own.”

May Karla S. Mendoza Peter Glen Velonza


BSENSE11S4 Professor
1. Define 3 important terms. Specify the time on the video where you find it. (3 points
each)
2. In 3 to 7 sentences, articulate 1 learning point. Provide a screenshot on the basis of
your answer then explain. (5 points)
3. Explain 2 significance of Demand and Supply to an entrepreneur. (3 points each)

1. Demand @ 0:31 video time

In economics, demand and supply are fundamental concepts that describe the behavior of buyers
and sellers in a market.
1. Demand:
Demand refers to the quantity of a good or service that consumers are willing and able to
purchase at various price levels, holding all other factors constant.
Key Factors Affecting Demand (Determinants or Shifters of Demand):
These factors cause the demand curve to shift either to the right (increase in demand) or to the left
(decrease in demand):
•Income: When consumers' income increases, they tend to buy more, increasing demand for
normal goods.
•Tastes and Preferences: Changes in consumer preferences can increase or decrease demand.

2. Supply @ 3:28 in the video


Supply refers to the quantity of a good or service that producers are willing and able to offer at
various price levels, holding all other factors constant.
Key Factors Affecting Supply (Determinants or Shifters of Supply):
These factors cause the supply curve to shift either to the right (increase in supply) or to the left
(decrease in supply):
•Input Prices: If the cost of production (e.g., labor, materials) decreases, supply increases.
•Technology: Advancements in technology can make production more efficient, increasing supply.
•Prices of Related Goods: If a producer can make more profit from an alternative product, they
may supply less of the current product. Expectations of Future Prices: If producers expect higher
future prices, they might reduce supply now to sell later at higher prices. Number of Sellers: More
sellers in the market will increase supply. Government Policies: Taxes, subsidies, and regulations can
influence supply.

3. demand shifter @ 3:22 in the video


refers to any factor that causes the entire demand curve for a good or service to shift, either to the
right (an increase in demand) or to the left (a decrease in demand). Unlike movements along the
demand curve, which occur due to changes in the price of the good itself, demand shifts are
caused by changes in external factors that influence the demand for the good. These factors
include:
1.Income levels: Higher consumer income generally shifts the demand curve to the right
(increasing demand), while lower income shifts it to the left.
2.Consumer preferences: A change in tastes or preferences can increase or decrease demand. For
example, a new trend might increase the demand for a particular product.
3.Prices of related goods: The demand for a product can shift depending on the price of substitutes
(goods that can replace it) or complements (goods that are used together with it). For example, a
drop in the price of smartphones may increase the demand for phone cases (complements).
Question 2

Learning Point:
Demand and supply are fundamental principles that
determine the market equilibrium, which is the price at
which the quantity of a product demanded by
consumers equals the quantity supplied by producers. A
key learning point is that changes in demand or supply
can lead to surpluses (excess supply) or shortages
(excess demand), which, in turn, prompt price
adjustments to restore balance.

Significance of Demand and Supply to an Entrepreneur:


1.Pricing Strategy: Understanding demand helps entrepreneurs set
prices optimally. If demand is high and supply is limited, prices can be
raised to maximize profits, while low demand might necessitate price
reductions to attract customers.
2.Resource Allocation: Supply analysis helps entrepreneurs manage
production costs and inventory. By anticipating market conditions,
entrepreneurs can adjust their supply to avoid overproduction (leading
to wasted resources) or underproduction (leading to missed sales
opportunities).

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