MANAGERIAL ECONOMICS

ECON 105 – TUTORIAL QUESTIONS Topic: Demand, Supply and Market Equilibrium

NAME/S: (1)_______________________________________ COURSE/BLOCK: _____________

(2)_______________________________________
(3)_______________________________________

1. Define the following concepts and explain their economic significance:

a. Demand

b. Quantity demanded

c. Direct/Positive relationship

d. Inverse/Negative relationship

e. Normal Goods

f. Inferior Goods

g. Substitute Goods

h. Complementary Goods

i. Supply
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j. Market Equilibrium

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 MANAGERIAL ECONOMICS
ECON 105 – TUTORIAL QUESTIONS Topic: Demand, Supply and Market Equilibrium

2. Illustrate the Demand and Supply curve and properly label the graph.

Demand Supply

3. Illustrate the difference between a Change in Demand and a Change in Quantity

demanded.

Change in Demand Change in Quantity demanded

4. Illustrate the difference between a Change in Supply and a Change in Quantity Supplied.

Change in Supply Change in Quantity supplied

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 MANAGERIAL ECONOMICS
ECON 105 – TUTORIAL QUESTIONS Topic: Demand, Supply and Market Equilibrium

5. Determinants of Demand and Supply. Fill in the missing algebraic signs (+ or - ) of the
demand and supply equations for chicken meat used in making the local dish “TINOLA”
below according to the hypothesized direction of relationships.

𝑸𝑫
𝒄𝒉𝒊𝒄𝒌𝒆𝒏 𝒎𝒆𝒂𝒕 = ___ PC ___ N ___ I ___ T ___ PB ___ PP

𝑸𝑺𝒄𝒉𝒊𝒄𝒌𝒆𝒏 𝒎𝒆𝒂𝒕= ___ PC ___ Tech ___ W ___ WM ___PF

Where: Q - quantity of chicken meat in kilograms, per day

PC - price of chicken meat (in pesos per kilograms)
I - income of the average consumer (in pesos per day)
PB - price of beef (in pesos per kilogram)
PP – price of Papaya (in pesos per piece)
N – market size for chicken
T – Taste/preference of the consumers
WM - wage rate paid in the poultry business (in pesos per day)
W – current weather (rainy season)
PF - price of mixed feeds (in pesos per kilogram)
Tech – Technology used in poultry business (manual labor)

Note: Reflect on the effects of the different factors of demand and supply to the quantity demanded and
quantity supplied, respectively. Is it positive (+) relationship or negative (-) relationship.

6. Illustrate the market equilibrium and properly label the graph.

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 MANAGERIAL ECONOMICS
ECON 105 – TUTORIAL QUESTIONS Topic: Demand, Supply and Market Equilibrium

7. Using the demand and supply equations, solve for the Equilibrium Price and Quantity
and complete the table below (show one sample solution for QD and QS)

QD = 2,350 – 25P QS = 5P + 1,300

Where: QD – Quantity Demanded

QS – Quantity Supplied
P – Price

Price QD QS Surplus/Shortage
65
55
45
35
25
15

8. DEMAND – For each of the following cases, illustrate and state how demand for the
vehicle, “MITSUBISHI Mirage”, behaves, i.e., whether there is an increase or decrease in
demand or in quantity demanded.
a. The price of gasoline rises because of a shortage in the world petroleum market.
b. A lower “HYUNDAI eon” enters the car market.

9. SUPPLY – Illustrate and indicate whether a movement upward or downward along the
supply curve, or a shift leftward or rightward of the supply curve of MANGOES occurs for
the following cases:
a. The current crop of mangoes is infested by fruit flies.
b. The price of pesticides against fruit flies increases due to 10 percent import levy.

10. MARKET EQUILIBRIUM. Describe what will happen to equilibrium price and quantity of
each of the commodities given the corresponding hypothetical situations.
a. Coffee: The Philippine Medical Association announces that caffeine in coffee
causes heart attack.
b. Pork: Foot and mouth disease (FMD) hits thousands of pigs resulting in a very high
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mortality rate.

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