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AND DEMAND
INTRODUCTION
INTRODUCTION
• Classical economics present a relatively static model of the
interactions among PRICE, SUPPLY and DEMAND.
• The classical demand and supply curve demonstrated,
mostly shows dependence of supply and demand on price,
but do not provide adequate information on how equilibrium
is reached or the time scale involved.
• In reality, market price is affected by the inventory of goods
held by the manufacturers rather than the rate at which
manufacturers are supply goods.
INTRODUCTION CONT.
• Table 1 is called a schedule of demand and supply. For each price, it indicates how
much clothing is demanded by the consumers per week, and how much clothing is
supplied per week.
• You will notice that as price decreases, demand increases and supply decreases.
Eventually demand exceeds supply.
DEMAND AND SUPPLY SCHEDULE
Quantity Quantity
Demanded Supplied
Price (per week) (per week)
₦ 5,000.00 10 100
₦ 4,500.00 14 97
₦ 4,000.00 18 94
₦ 3,500.00 22 89
₦ 3,000.00 28 84
₦ 2,500.00 35 77
₦ 2,000.00 45 68
₦ 1,500.00 57 57
₦ 1,000.00 73 40
₦ 500.00 100 0