Main Topic 2 Scarcity Demand and Supply
Main Topic 2 Scarcity Demand and Supply
SUPPLY
➢works in the free market by
SCARCITY supply and demand, which
can fluctuate the price of a
good or service over time,
when there is more or less of
it available.
➢Extremely high pricing can
create less demand in
response and some companies
may look to other alternatives
➢happens when the demand for
SCARCITY a natural resource, product or
service exceeds the supply.
➢It often implies that the
current level of use of a
natural resource is
unsustainable in the long-
term, most often for these two
kinds:
➢Non-renewable resources
➢Renewable resources
➢Non-renewable
SCARCITY resources: Natural elements like
oil and precious metals that
cannot be replenished once gone
scarcity? ✓Labor
diplomacy
✓Weather and
natural disasters
✓Fixed roadways
Budget and choices of
consumers
➢A budget constraint is a
Budget constraint imposed on consumer
choice by their limited budget.
1.How much do I
value this?
2.What am I giving
up now to have this?
3.What am I giving
up in the future to
have this now?
Difference between Opportunity cost
and sunk cost
10
8
A (0,5)
6
B (4,4) C (8,3)
4
D (12,2) E (16,1)
2
F (20,0)
0 2 4 6 8 10 12 14 16 18 20
BUS TICKET – 0.50 CENTS
O pportunity cost
10
DRESSES -$100
6
A (0 , 5) B (2 , 4)
4
C (4 , 3) D (6 , 2)
2
E (8 , 1) F (10 , 0)
0 SHOES
0 2 4 6 8 10 12 -$50
demand and
demand curve
• Demand is the relationship between
demand price and quantity demanded. It is also
defining as the amount of goods and
services that the consumer/
buyer/end-user are willing and able to
consume/buy/use in different prices at
a particular time.
• Demand is based on needs and
wants—a consumer may be able to
differentiate between a need and a
want, but from an economist’s
perspective, they are the same thing.
Demand is also based on ability to
pay. If you can’t pay for it, you have
no effective demand.
• The amount of a good that a
Quantity buyer is (buyers are) willing
and able to purchase during a
demand specified period of time.
• Quantity demanded refers to a
particular number of units.
• The relationship between price
and quantity demanded is
known as the demand
relationship.
• A rise in the price of a good or service
Law of almost always decreases the quantity of
that good or service demanded.
Conversely, a fall in price will increase the
demand quantity demanded. When the price of a
gallon of gasoline goes up, for example,
people look for ways to reduce their
consumption by combining several
errands, commuting by carpool or mass
transit, or taking weekend or vacation trips
closer to home. Economists call this
inverse relationship between price and
quantity demanded the law of demand.
The law of demand assumes that all other
variables that affect demand are held
constant.
Demand
Schedule
The demand schedule shows the
tabular representation of the relationship
between the quantity of a good demanded
and the price of that good. Other factors that
may affect the quantity demanded, such as
the prices of other goods, are held constant
in drawing up the demand schedule.
Demand
Curve
Demand Curve is the curve that
shows relationship between price and
quantity demanded.
It is downward sloping which implies that
there is negative relationship between price
and quantity
demanded.
Difference between individual demand
and market demand
THANK
Members:
YOU! Bacay, Mariel C.
Bool, Cheska Daphnie M.
Closa, Angelo M.
Lacbao, Patricia Reign E.
Macasinag, Lea D.
Maniebo, Lorena P.