Introduction
Good morning students, today we are going to talk about demand and supply. How they work,their laws as well as when they both are equal
look at the video below to understand it.
Task
write the following task to test your knowledge.
Due date : 02 May 2021
Task 2
marks [20]
Answer all the questions
Question 1
Multiple choice
1.1 choose the correct answer from the following
(i) demand is the amount of goods and services available and a given time.
(ii) where people spend less because of tax
(ii) equilibrium
1.2 choose the INCORRECT answer: factors that affect demand are as follows
(i) market place
(ii) price of goods and services
(iii) preference of consumers
1.3 an increase in the price of electricity will:
(i) increase the demand for kerosene heaters
(ii) increase the demand for TV
(iii) increase the demand for light bulbs
1.4 which of the following will decrease demand
(i) increase on price of goods and services
(ii) increase of supply
(iii) decrease of prices
1.5 which of the following can lead to an increase in the supply
(i) decrease in the number of sellers of goods
(ii) an increase in the input prices
(iii) an improvement of technology used during production
Question 2
long questions
2.1 list 2 factors of demand and 3 of supply. (5)
2.2 what is demand ? (2)
2.3 what is supply (2)
Question 3
3.1 what happens if demand is equal to supply? (3)
3.2 what happens if the machines in factories are outdated? how does that affect supply state 3 points (3)
Process
PLEASE WATCH THE VIDEO BELOW TO UNDERSTAND THE TOPIC FOR TODAY.
TOPIC: DEMAND AND SUPPLY
What Is Demand
In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given period of time. The relationship between price and quantity demanded is also called the demand curve.
Demand is an economic principle referring to a consumer's desire to purchase goods and services and willingness to pay a price for a specific good or service. Holding all other factors constant, an increase in the price of a good or service will decrease the quantity demanded, and vice versa. Market demand is the total quantity demanded across all consumers in a market for a given good. Aggregate demand is the total demand for all goods and services in an economy. Multiple stocking strategies are often required to handle demand.
Demand: FACTORS
Demand is affected by various factors. It relates to how products and services are consumed. This is because, in a free economy, it regulates and works alongside supply on the market.
Four factors that affect demand are price, buyers' income level, consumer taste, and competition.
- Price: It is the most important factor that affects demand. This is because increases in this factor can cause demand to fall fast.
- Buyer's income level: The higher this level, the more demand there is likely to be.
- Consumer taste: This influences demand because people will always only buy things that they are drawn to.
- Competition: This factor relates to how many companies are producing the same or similar products. It not only affects demand, but also price.
LAW OF DEMAND
The law of demand is one of the most fundamental concepts in economics. ... The law of demand states that quantity purchased varies inversely with price. In other words, the higher the price, the lower the quantity demanded.
SUPPLY
In economics, supply is the amount of a resource that firms, producers, labourers, providers of financial assets, or other economic agents are willing and able to provide to the marketplace or to an individual. Supply can be in produced goods, labor time, raw materials, or any other scarce or valuable object.
Supply is a fundamental economic concept that describes the total amount of a specific good or service that is available to consumers. Supply can relate to the amount available at a specific price or the amount available across a range of prices if displayed on a graph
FACTORS THE AFFECT SUPPLY
(i) Natural Conditions:
If rainfall is plentiful, timely, and well distributed, there will be bumper crops. On the contrary, floods, droughts, or earthquakes and other natural calamities are bound, to affect production adversely. This is one set of conditions which brings about a change in the supply.
(ii) Technical Progress:
The volume of production or supply is also influenced by progress in the technique of production. In manufacturing industries, this is a very important factor. A new machine may have been invented, a new process discovered, or a new material found, or perhaps a new use may have been found for a by-product. The discoveries of synthetic dyes, artificial rubber and wool are some such discoveries or improvements in technique.
iii) Change in Factor Prices:
A change in the prices of the factors of production also brings about a change in the supply of the commodity. If the factors of production become cheap, the supply will increase, and vice versa.
(iv) Transport Improvements:
Improvement in the means of transport reduces the cost and increases the supply of the product. Thus conditions of supply change.
LAW OF SUPPLY
The law of supply is the microeconomic law that states that, all other factors being equal, as the price of a good or service increases, the quantity of goods or services that suppliers offer will increase, and vice versa. The law of supply says that as the price of an item goes up, suppliers will attempt to maximize their profits by increasing the quantity offered for sale.
Evaluation
| QUESTION | 1 | 5 MARKS | MULTIPLE CHOICE |
| QUESTION | 2 | 9 MARKS | LONG QUESTIONS |
| QUESTION | 3 | 6 MARKS | LONG QUESTIONS |
| TOTAL | 20 MARKS |
QUESTION 1 is a multiple choice meaning you only choose the correct answer do not re-write the questions
QUESTION 2 AND 3 are long questions give your full understanding.
Conclusion
Please study all the notes i gave you, watch all the videos because sooner or later i will give you an assessment and test a very long one.
Know the definition of demand and supply.
- Their laws
- factors that affect them
- equilibrium
Credits
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