AE3B-LAW-OF-SUPPLY.pdf

Key concepts A market is an interaction between buyers and sellers of trading or exchange. It is where the consumer buys and the seller sells. The good market is the most common type of market because it is where we buy consumers goods. The labor market is where workers offer services an...

Key concepts A market is an interaction between buyers and sellers of trading or exchange. It is where the consumer buys and the seller sells. The good market is the most common type of market because it is where we buy consumers goods. The labor market is where workers offer services and look for jobs, and where employers look for workers to hire. There is also the financial market which include the stock market where securities of corporations are traded.  SUPPLY Registration Number: QAC/R63/0216 Department of Education-Division of Quezon  SUPPLY It refers to the quantity of goods that a seller is willing to offer for sale. Registration Number: QAC/R63/0216 Department of Education-Division of Quezon Registration Number: QAC/R63/0216 Department of Education-Division of Quezon  BASIC FACTOR AFFECTING SUPPLY Price Quantity Registration Number: QAC/R63/0216 Department of Education-Division of Quezon CHANGE IN QUANTITY SUPPLIED  OTHER FACTORS AFFECTING SUPPLY Non-Price Factors Registration Number: QAC/R63/0216 Department of Education-Division of Quezon  Non-Price Factors Quantity Registration Number: QAC/R63/0216 Department of Education-Division of Quezon SHIFT IN SUPPLY CURVE Quantity Supplied describes the number of goods or services that suppliers will produce and sell at a given market price. Supply Function shows the dependent of supply on the various determinants that affect it. Assuming that the supply function is given as Qs = 100 + 5P and is used to determine the quantities supplied at the given prices. Table 1.2 Supply Schedule of Pedro for Fish in One Week Price of Fish (per Kilo) Supply (in kilos) P 20 200 40 60 80 100 Assuming that the supply function is given as Qs = 100 + 5P and is used to determine the quantities supplied at the given prices. Table 1.2 Supply Schedule of Pedro for Fish in One Week Price of Fish (per Kilo) Supply (in kilos) P 20 200 40 300 60 400 80 500 100 600 120 100 80 60 40 20 0 100 200 300 400 500 600 Quantity Supplied (in hundred kilos) EQUILIBRIUM Equilibrium is a state of balance when demand is equal to supply. The equality means that the quantity that sellers are willing to sell is also the quantity that buyers are willing to buy for a price  Equilibrium Price – When buyers and sellers transact in the market and they agree on the price of the commodity and the amount to be sold and bought. Disequilibrium – Cases when there are disagreements among buyers and sellers on the price and quantity (excess demand and excess supply)