Economics Demand and Schedule Quiz

Demand

• Demand refers to the quantity of a commodity consumers are willing and able to purchase at a specific price and time.
• Effective demand is a want or need supported by the willingness and ability to pay.
• Law of demand states: Higher price = lower quantity demanded; lower price = higher quantity demanded (ceteris paribus).
• Demand schedule is a table showing the relationship between price and quantity demanded.
  • Individual demand schedule: Shows quantities a single consumer would buy at different prices.
  • Market (aggregate) demand schedule: Shows total quantities all consumers would buy at different prices.

Demand Schedule for Milk (Mr. Austin)

• Shows quantities Mr. Austin would buy at various milk prices.

Market Demand Schedule (Milk)

• Shows total quantities all consumers would buy at various prices.
• Includes individual demand quantities of multiple consumers.

Demand Curve

• Graph showing the relationship between price and quantity demanded at any point in time.
• Curve slopes downwards, illustrating inverse relationship.

Factors Affecting Demand

• Price of the commodity
• Price of other commodities
• Government policy
• Taste and fashion
• Consumer income
• Weather and climate
• Advertising spending
• Population size
• Price expectations

Types of Demand

• Complementary demand: Two or more commodities needed together (e.g., car and petrol).
• Competitive demand: Close substitutes (e.g., tea and coffee).
• Derived demand: Demand for a commodity to produce another (e.g., flour to make bread).
• Composite demand: A commodity used for multiple purposes (e.g., palm oil for cooking and making soap).

Supply

• Supply is the quantity of a commodity sellers are willing and able to offer for sale at a particular price and time.
• Effective supply: Part of total production offered at ruling market price.
• Supply schedule: Table showing quantity supplied at different prices.
  • Individual supply schedule: Shows quantities one supplier would offer at various prices.
  • Market (aggregate) supply schedule: Shows total quantities all suppliers would offer at various prices.
• Individual Supplier Schedule (Sugar for Mr. Gbenga):

Market Supply Schedule (Sugar)

• Shows total quantities all suppliers would offer at various prices.

Supply Curve

• Graph showing relationship between price and quantity supplied.
• Curve slopes upwards, illustrating direct relationship

Factors Affecting Supply

• Prices of other commodities
• Taxation
• Weather
• Number of producers
• Government policies
• Technological advancements

Law of Supply

• Higher price = higher quantity supplied
• Lower price = lower quantity supplied

Types of Supply

• Composite supply: Commodity with multiple uses
• Competitive supply: Commodity with alternative uses (e.g., land for farming or housing)
• Joint supply: Two or more commodities produced together (e.g., beef and hides)