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ABM-APPLIED ECONOMICS 12 - Q1 - W3 - Mod3
ABM-APPLIED ECONOMICS 12 - Q1 - W3 - Mod3
Department of Education
National Capital Region
DIVISION OF CITY SCHOOLS – MANILA
Manila Education Center Arroceros Forest Park Antonio J.
Villegas St. Ermita, Manila
Applied Economics
Market Demand, Market Supply
and Market Equilibrium
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Learning Module for Business
LESSON
3 Market Demand, Market Supply,
and
Market Equilibrium
EXPECTATIONS
You will represent real-life situations using the market demand, market
supply and market equilibrium. Specifically, this module will help you to:
PRE-TEST
Directions: Please analyze the graph and answer the questions below.
graph
b) If the price is above the equilibrium level,
what could you predict with the demand and
supply?
c) If below the equilibrium point what could you
predict with the demand and
supply? https://www.thoughtco.com/calculating-economic-equilibrium-1147698
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PART II. FILL IN THE BLANKS
Great, you finished answering the questions. You may request your facilitator to check your
work. Congratulations and keep on learning!
Last module, we discussed the issues on the factors of production and how
these affect the economy, the basic problems facing the local and global
economics, and the roles of economics in solving these problems.
Identification. Identify the following problems that may exist in the local and
global economies during production of goods and services. Choose from the
factors below. Just write the letter.
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BRIEF INTRODUCTION
In economics, there are terms that you must learn to understand the
better market situations. A demand or the amount of good or service
consumers are willing to purchase at each price. If customers cannot pay for it,
there is no effective demand. Price is what a buyer pays for a unit of the
specific good or service. The total number of units purchased at that price is
called the quantity demanded.
If all other factors remain equal, the higher the price of a good, the fewer people will demandth
“the higher
Forthe price, if the price of video game drops, the demand for games may increase as m
example,
the lower the quantity demanded” and vice versa.
The amount of a good that buyers purchase at a higher price is fewer because as the price of goo
Consumers will avoid buying a product.
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Learning Module for Business
https://www.ducksters.com/money/supply_and_demand.php
price or market-clearing price. is the price at which the producer can sell all the units he wants
Supply and demand are balanced, or in equilibrium. the demand curve is downward sloping. Thi
due to the law of diminishing marginal utility.
The supply curve is a vertical line; overtime, supply curve slopes upward; the more suppliers ex
In the Equilibrium point, the two slopes will intersect. The market price is sufficient to induce
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ACTIVITIES
1.Supply, Demand
Under the dowryand Marriage
system in India, a market with more women seeking
By Robert H. Frank
partners, the trade shift favors the men. What law or economic principle
Inissome
applicable?
cultures, romance isn’t nearly as important as cash when it
comes to choosing a marriage partner. And even when money plays no .
explicit role in selecting a mate, courtship customs are governed by
2.the
Invenerable
the same economic
system, men model of supply
with and receive
better jobs demand. Under
larger the dowryWhat
payments.
system in India,
economic for example,
principle parents
is applicable to of this
older brides wouldJustify
situation? typicallyyour
pay more
answer. to prospective grooms. Men with better jobs would receive
larger payments, too. In short, there really is a marriage market in
many countries around the world, and economic principles apply to it.
In markets with a preponderance of women seeking partners, the
3.terms
Stateofthe law shift
trade of demand.
in favor of men. If more men are seeking partners, the
reverse is true.
https://www.nytimes.com/2011/08/07/business/economy/marriage-and-the-law-of-supply-
and- demand.html
4. State the law of supply.
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Activity 2. The Law of Demand and Supply
Directions: Analyse this problem. The following data were taken from an
invoice of Company X. The company imports gasoline from other country.
Price
Qd
Figure 1. Price and Quantity Demanded of Gasoline
Legend: P – Price; D- Demand; Qd –Quantity Demanded
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Learning Module for Business
Activity 3. Problem Solving
Directions: Analyze the problem. The following are sets of data taken from the
invoice of Company X. The company imports gasoline from other country.
1.00 500
1.20 550
1.40 600
1.60 640
1.80 680
2.00 700
2.20 720
Table 2. Price and Supply of Gasoline
Qd
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3.3) Using the data from demand and supply,
Qd
Figure 3. The Equilibrium Price
b) How much is the price in the equilibrium point? Present your solution here.
Solution:
Answer:
Sources: https://opentextbc.ca/principlesofeconomics/chapter/3-1-demand-supply-and-equilibrium-in-markets-
for- goods-and-services/
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REMEMBER
What Provison
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POST-TEST Learning Module for Business
1.The upward slope of the supply curve illustrates the law of demand—
―higher price leads to a higher quantity supplied, and vice versa‖.
2.The downward slope of the demand curve illustrates the law of
supply—the inverse relationship between prices and quantity demanded.
3.Time is important to supply because suppliers must react quickly to
a change in demand or price.
4.A shift in a demand or supply curve occurs when quantity demanded
or supplied changes even though price remains the same.
5.The law of supply says that ―at higher prices, sellers will supply
more of economic goods‖.
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9. The market supply curve for gasoline shows the
a. effect on market demand of a change in the supply of gasoline.
b. quantity of gasoline that firms offer for sale at different prices.
c. quantity of gasoline that consumers are willing to buy at different prices.
d. All of the above are correct.
10. If Toyota firm is producing a car faster than people want to buy, there is
a. an excess supply of car and price can be expected to decrease.
b. an excess supply of car and price can be expected to increase.
c. an excess demand of car and price can be expected to decrease.
d. an excess demand and price can be expected to increase.
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www.kahanasunset.com
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E-SITES
To further explore the concept learned today and if it possible to connect the internet,
you may visit the following links:
https://www.slideshare.net/lntrullin/supply-and-demand-1184484
https://www.ducksters.com/money/supply_and_demand.php
REFERENCES
Articles
Amadeo, K. (2020) Elastic Demand: Definition, Formula, Curve, Examples. Retrieved on
Jun 03 2020 from https://www.thebalance.com/elastic-demand- definition-formula-
curve-examples-3305836; https://www.thebalance.com/inelastic-demand- definition-
formula-curve-examples-3305935
Chappelow, J (2019) Law of Supply and Demand. Retrieved on June 03 2020 from
https://www.investopedia.com/terms/l/law-of-supply-demand.asp
Patindol J L (2012)The Law of Supply and Demand . Retrieved on Jun3 03 2020 from
https://www.slideshare.net/shufflejoy000/the-law-of- supply-and-demand
Websites
https://opentextbc.ca/principlesofeconomics/chapter/3-1-demand-supply-and-
equilibrium-in-markets-for-goods-and-services/
https://www.investopedia.com/ask/answers/041615/what-are-some-examples-law-
demand-real-markets.asp
https://www.ducksters.com/money/supply_and_demand_examples.php
https://www.thebalance.com/shift-in-demand-curve-when-price-doesn-t-
matter-3305720
https://www.investopedia.com/ask/answers/012915/what-difference-between-
inelasticity-and-elasticity-
https://www.sparknotes.com/economics/micro/elasticity/problems/
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https://int.search.myway.com/search/AJimage.jhtml
https://global.oup.com/us/companion.websites/9780199811786/student/chapt2/m
ultiplechoice/
https://www.nytimes.com/2011/08/07/business/economy/marriage-and-the-law-of-
supply-and-demand.html
https://www.majortests.com/essay/Supply-And-Demand-571384.html
https://study.com/academy/popular/supply-and-demand-activities-for-kids.html
https://www.slideshare.net/shufflejoy000/the-law-of-supply-and-demand
https://www.thoughtco.com/supply-and-demand-practice-questions-1146966
Acknowledgment
Management Team:
Maria Magdalena M. Lim, Schools Division Superintendent-Manila
Aida H. Rondilla, Chief Education Supervisor Lucky S. Carpio, EPS In Charge of LRMD
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Name Year/Section Date
Teacher School
https://www.slideshare.net/shufflejoy000/the-law-of- supply-and-demand
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ANSWER KEY
PRETEST
PART I
A
B. Oversupply/surplus – the
quantity supplied is greater
than the quantity demanded
C. Shortage/scarcity -
The quantity supplied is less
than quantity demanded
PART II
1. The law of demand
2. The law of supply
ACTIVITIES:
Activity 1
1. The law of demand - According to the model above, ―Supply, Demand
and Marriage‖ excess demand for grooms should have caused the terms
of courtship to shift in favor of men. Economics teaches us that when
there is excess demand for a good, its price rises.
2. The law of supply - ―Men with better jobs would receive larger payments.
This can be compared to the supply of product at a given price. ―As the
price of a product increases, companies will produce more of the
product‖.
3. The law of demand – ―the higher the price, the lower the quantity demanded‖
and vice versa
4. The law of supply – ―the higher the price, the higher the quantity supplied’
and vice versa.
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Activity 2.1
Sources: https://opentextbc.ca/principlesofeconomics/chapter/
3-1-demand-supply-and-equilibrium-in-markets- for- goods-and-services/
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CHECK YOUR UNDERSTANDING
1) The laws of supply and demand
4) Constant
2) The Law of supply
5) Equilibrium
3) Curve
6) The law of demand
POST TEST
PART I. True or False
1. False 4. True
2. False 5. True
3. True
6. A 9. B
7. B
10.A
8. B
PART III. Answer: No. This is not simply a move along the demand curve. In
December, demand for ―hamon‖ rises, causing the curve to shift to the right.
This allows both the price of ―hamon‖ and the quantity sold of Christmas trees
to rise.
Work Sheet
1. Law of Supply (TRUE)
―a higher price leads to a greater quantity supplied; and a lower price
leads to a lower quantity supplied. Assume that all other variables are
held constant.‖