L4: Demand Function, Supply, and Supply Function

• Demand

  • various quantities or commodities which buyers are willing and able to purchase at a given time, price and place. (Fajardo, 1995)
• Demand Function

  • a representation of the relationship between demand and all of its determinants.
  • FORMULA: Qd=a-bP
• Determinants of Demand (other than Price)

  1. Money Income and Salary
  2. Prices of Goods and Other Goods
  3. Buyer's Expectations
  4. Number of Consumers in the Market
  5. Consumers’ Taste and Fashion
• Money Income and Salary

  • money is the medium of exchange.
  • People who are employed receive income, therefore, they have the power to buy.
• Supply

  • the quantity of goods or services producers can offer.
• Supply Schedule

  • shows the tabular representation of the relationship between the quantity of good supplied and its price (Balitao et al., 2015).
• Supply Curve

  • a graphical representation of the supply schedule.
• LAW OF SUPPLY

  • This law stated the price and quantity have a direct relationship.
• Supply Function

  • it is a representation of the relationship between price and quantity supplied
  • FORMULA: Qs=c+dP
• Prices of Commodities

  1. Equilibrium Price
  2. Market Equilibrium
  3. Disequilibrium
  4. Shortage
  5. Surplus
• Equilibrium Price

  • Buyers and sellers transact in a market they agree on the price of the commodity and the amount to be sold and bought.
• Market Equilibrium

  • when the quantity of supply and demand are balanced or equal at a given price level.
• Disequilibrium

  • condition when the quantity supplied is not equal to the quantity demanded.
  • RESULTS: the shortage and surplus.