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Demand and Supply Notes Econ 4th Form

The document explains the concepts of demand and supply in economics, detailing how market forces influence these factors. It outlines the law of demand, law of supply, and provides demand and supply schedules, illustrating their inverse and direct relationships, respectively. Additionally, it defines the equilibrium point where quantity demanded equals quantity supplied at a specific price.

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10 views3 pages

Demand and Supply Notes Econ 4th Form

The document explains the concepts of demand and supply in economics, detailing how market forces influence these factors. It outlines the law of demand, law of supply, and provides demand and supply schedules, illustrating their inverse and direct relationships, respectively. Additionally, it defines the equilibrium point where quantity demanded equals quantity supplied at a specific price.

Uploaded by

jadon.smith
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Demand and supply Economics 4th form

Read chapter 8 of Gopie textbook or find the relevant chapter in the textbook that you have.
Market
A situation where the buyers and sellers communicate for the purpose of exchanging goods and
services.

Market forces
Factors that affect demand are called determinants of demand or forces of demand and factors
that affect supply are called determinants of supply or forces of supply. The market forces are
the conditions of demand and supply that affect demand and supply in the market.

Demand
Demand is the amount of goods and services that consumers are willing and able to purchase at
different prices over a particular period of time. When consumers demand a good, it means
that they desire the good and is willing and able to buy the good. This is effective demand.

The law of demand


The higher the price, the less that will be demanded and the lower the price, the more that will
be demanded, ceteris paribus. Ceteris paribus means other things remaining constant or other
things do not change.

Demand schedule
This is a table which shows the quantity of a good consumers’ demand at each price in a given
period of time. The demand curve is drawn from the demand schedule.

Demand schedule
Price ($) Quantity demanded
20 400
25 350
30 300
35 250
40 200
45 150
50 100

Draw the demand curve from the information above. Price on Y and quantity demanded on X
axis.
Demand curves are negatively sloped as they slope downwards from left to right. This means
that the price and quantity demanded have an inverse relationship. When one is low, the other
is high.
Supply
Supply is the provision of a good or service a particular product at a particular price during a
specific period of time.

Law of supply
As price increases, the quantity supplied increases and when price decreases, so does the
quantity supplied, ceteris paribus.

Supply schedule
This is a table which shows the quantity of a good suppliers supply at each price in a given
period of time. The supply curve is drawn from the supply schedule.

Supply schedule

Price ($) Quantity supplied


20 100
25 150
30 200
35 250
40 300
45 350
50 400

Draw the supply curve from the information above. Price on Y and quantity supplied on X
axis.
The supply curve is positively sloped, that is, upwards from left to right. This indicates that
there is a direct relationship between price and quantity supplied, when one is high the other is
high and when one is low, the other is also low.
Equilibrium point
This is where the quantity demanded by consumers is equal to the quantity supplied by
suppliers at a particular price.
Price ($) Quantity demanded Quantity supplied
20 400 100
25 350 150
30 300 200
35 250 250
40 200 300
45 150 350
50 100 400

Draw the demand and supply curves from the information on the schedule above.

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