Transcript Demand

Economics Project
Demand , Supply and Price
S
P
F.4B
Ivy Lam (21)
Jenny Leung (23)
Jane Li (24)
Jessie Wong (34)
P1
D
Q1
Q
catalogue
What is demand-----------1
Factors affecting changes in demand(1)-----------2
Factors affecting changes in demand(2)-----------3
Demand Schedule-----------4
Supply Schedule-----------5
How to the demand & supply diagram-----------6
What is supply-------7
Factors affecting changes in supply(1)-----------8
Factors affecting changes in supply(2)-----------9
What is excess supply/demand? What is market
equilibrium price?-----------10
Summary-----------11
Member’s feel-----------12
What is DEMAND?
Demand is not the same as want.
Want refers to human psychological desire for things. They
may not be willing to but it or they may not able to afford it.
Demand is a want supported by purchasing power. A
person will have an effective demand for a good only when
he is willing and able to buy the good at given prices.
Quantity demanded refers to the quantity of a good
that a consumer is willing and able to buy at a particular
price per period of time.
Market demand refers to the demand for a good or
service at different prices by all consumers in the market
over a certain period of time, ceteris paribus.
The law of demand states that the quantity
demanded varies inversely with prices, ceteris paribus.
FACTORS AFFECTING CHANGES IN DEMAND(1)
Income: A change in income of consumers (real
income that measured in terms of purchasing
power)will affect their demand for goods and
services.It will affect the demand for
superior/normal, inferior, neutral goods.
P
D’
D
Q
When the income
increase,then the
demand for first-class
beef will increase.
Taste and preference:When there is a change
When it become
in tastes or preferences in favor of a good, in
fashionable to wear
taste goes against a good and promotion or
pleated skirt,then
D’
fashion,these can affect the demand for goods.
the demand for
D
these will increase.
Q
Price of other related Quantity demanded Demand for raincoat When the price of
goods:The substitutes for umbrella
umbrella increases.
and complements also can P
The quantity
P
S
affect the demand.
demanded for it
Substitutes are goods
will decrease. As
P1
that can be used to
umbrella and
P0
substitute/replace each P1
raincoat are
D
D’ substitutes,
other. Complements are P0
D
goods that are used
demand for
Q
together and one requires
raincoat will
Q
Q1 Q0
Q0 Q1
the buying of the other.
increase.
p
FACTORS AFFECTING CHANGES IN
DEMAND(2)
P
S
Seasons and weather
conditions: Demand for some
goods are heavily influenced by
seasons and weather conditions.
Demand for paper
When the
demand for book
increase, then the
demand for paper
also increase.
P’
P
Demand for bookQ
P
S
P’
P
D
Q
Population: When the
population increase, there will
be more consumers and demand
for a good increase.
D’
D
Q’
D’
In summer,
demand for
ice-cream will
increase.
Q
Q’
Derived demand:When a
good is demanded because
of demand for another
good in the market, We
say is a derived demand.
Q
Demand for food
P
S
P’
P
D
Q
Q’
D’
Q
In Li’s family, Mrs Li
born a baby, then
demand for food in
this family will
increase
Demand
Demand Schedule
Price
($)
Demand Schedule is a plan of
purchases of an individual showing
the quantity of the good he is
willing to buy at different prices.
quantity
Demand curve
A demand curve shows the
negative relationship
between the price and the
quantity demanded within a
time period, holding all the
other factors constant. It is
downward sloping.
Supply
Supply Schedule
Price
($)
Supply schedule is a plan of
production of a firm showing the
quantity of a good he is willing and
able to sell at different prices.
Quantity
A supply curve shows the
positive relationship between
the price and the quantity
supplied within a time period,
holding all other factors
constant. It is upward sloping.
Supply curve
(s)
How to draw the demand/supply
diagram?!?
WRITE DOWN [DEMAND /SUPPLY DIAGRAM FOR
XXX]
1: DRAW A VERTICAL LINE(PRICE)
2:DRAW A HORIZONTAL LINE
Demand /Supply
Diagram For xxx
P
(QUANTITY PER XXX)
3:READ THE DEMAND/SUPPLY
SCHEDULE
X
X
4:POINT THE PRICE AND QUANTITY
DEMANDED/ SUPPLIED
5:LINK THESE POINT
6:THIS IS THE DEMAND CURVE(D)
THIS IS A SUPPLY CURVE(S)
X
X
S
X
X
D
Q
What is Supply?
Supply refers to the producer’s willingness to sell,
supported by the ability to sell. A producer will have an
effective supply for a good only when he is willing and able
to sell the good at given prices.
Quantity supplied refers to the quantity of a good
that a producer (or seller) is willing and able to offer for
sale at a particular price per period of time.
Market supply refers to the supply of a good or service
by all producers in the market over a certain period of time,
ceteris paribus.
The law of supply states that quantity supplied varies
directly with price, ceteris paribus.
Factors affecting changes in supply(1)
P
Cost of production: An
Po
increase in factor prices will
lead to a higher cost of
P1
production, the firm will be able
to produce less at the same price.
With an improvement P
in technology,the
Po
production cost
P1
decreases, there will
be an increase in
supply for computers.
S
S
D
Q0
Q1
Q1
S’
D
Q0
S’
Q
If the production cost
decreases,there is an
increase in supply for
clothes. The supply curve
will shift to the right.
Q
Technology: With improvement in
technology, a more output can be
produced with the same amount of
factor inputs. Supply will increase
and the supply curve shifts to the left.
Joint good
Price of related goods: it is competitive
P
S
P
S’ Joint supply
supply and joint supply. Competitive
S Po
is opposite
supply :Two goods are in competitive P1
of
P1
supply if an increase in the supply of P0
D competitive
one good leads to a decrease in the
good.
Q
Q0 Q1
Q0
supply the other. Joint supply: Two
Q1
Q
When the price of mutton increase, the
goods are in joint supply if an increase
quantity supplied of wool increase. As mutton
in the supply of one good leads ti an
and wool are produced together, more wool will
increase in the supply of the other .
be available and the supply of wool will increase.
Factors affecting changes in supply(2)
P
Producers’ objective: Different
producers has different objectives in
production. This affects their plans of
production and hence their supply.
P1
P0
S’
P
When it have
typhoon, then the
P1
supply of vegetables P0
will decrease.
When the aim of supply
dress increase,then the
supply of dress will
increase.
S
Q0 Q1
Q
S
D
Q1 Q0
Q
Season and weather conditions: The supply
for some good are heavily influenced by
seasons and weather conditions.
Expectation of future prices: When firms expect the price of a good to rise, their
present supply for the good decrease, in the hope of selling more at a higher price in the
future.
P
S
S’ Number of sellers: when there re more
In Li’s toy company, the
P0
sellers, the supply for a good will
number of sellers increase, P1
then the supply of toy will
D increase, or vice versa.
increase too.
Q0 Q1
Q
What is excess supply/demand?
What is market equilibrium price?
Excess supply ( surplus) is the quantity supplied is greater
than the quantity demanded.
Excess demand is the quantity demanded is greater than
the the quantity supplied.
Equilibrium price is the price in the market at which there
is no tendency for it to change as long as consumers’ plan
of purchase and firms’ plan of production do not change.
In other words, the other words, the demand and the supply
curve do not shift.
Graphically, such changes are represented by shifting
of demand and supply curve or both.
Summary
It shows the market demand and supply schedules for dress in HK in a month.
Price per units($) Qs before cost Qs after cost Qd before it fashionable Qd after it fashionable
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MEMBER’S FEEL
Ivy Lam: It can help me know it more clearly to know about it and the real
situation. It just look like a exercise or text for us to study and research
economics more deep.
Jenny Leung: I feel after I finished this project, then it can increase my
knowledge of demand, supply, and equilibrium price.
Jane Li: In this project, the most important thing is it can help us know the
meaning of demand and supply clreadly.
Jessie Wong: Although economics is different, this project’s topice is more
different , we finished this project not easy………….it can help us so much.
BYE
BYE