WHAT IS MARKET?

• Markets are institutional arrangements that enable

buyers and sellers to exchange goods and services
(physical or virtual).

Markets have 2 things in common:

1. Demands by all people for products or the resources
that make them
2. A willingness by producers to supply those products
or resources
 WHAT IS DEMAND?
• Demand is a relationship between quantity and price.
• Demand is defined as the different quantities of a
resource, good or service that consumers are willing
and able to buy at any given time at various possible
prices.

• Demand is the ability and willingness to buy specific

quantities of goods in a given period of time at a particular
price, ceteris paribus.
WHAT IS DEMAND?
• Demand is a relationship between quantity and price.
• Demand is defined as the different quantities of a
resource, good or service that consumers are willing
and able to buy at any given time at various possible
prices.

Quantity Demanded is the amount of a commodity

that consumers wish to consume at a particular level.
WHAT IS DEMAND?
INDIVIDUAL DEMAND AND MARKET DEMAND

• Individual Demand
-is the relationship between the quantities of goods demanded
by a single buyer and their price.
• Market demand.
- Is the relationship between the total quantities of good
demanded by all consumers in the market and its price.
DEMAND SCHEDULE
Demand Schedule. It reflects the quantities
of goods and services demanded by a
consumer or an aggregate of consumers at
any given price
 Hypothetical Demand of
Beef in the Market
Price of Beef (Per Kilo) Quantity Demanded (QD in
Kilos)
₱300 20
₱250 40
₱200 60
₱150 80
₱100 100
₱50 120
DEMAND CURVE

• A graphical representation to express

the relation between prices and quantity
demanded by means of a curve.
DEMAND CURVE
Price (₱)
300 A Demand relationship
250 B
200 C
150 D
100 E
F
50
20 60 80 100 120
QD
40
LAW OF DEMAND
• The higher the price of the product, the lower
the quantity demanded and the lower the
price, the higher the quantity demanded other
things are constant.

• Price (P) Quantity demanded (Qd)

• Price (P) Quantity demanded (Qd)
 LAW OF DEMAND CONTINUED:
Example:
• If the price of chicken decreases, the quantity
demanded for chicken will …………………
• If the price of chicken increases, the quantity
demanded for chicken will ………………..
 LAW OF DEMAND CONTINUED:
• These scenario is only possible if we make the following
assumption(ceteris paribus):
1.Tastes and preferences of consumers remain unchanged.
2.Consumers’ income remains the same.
3.Price of goods which can be substituted with chicken
remain unchanged.
4.Goods should not have any prestige value.
DETERMINANTS OF DEMAND
1. Income. People buy more goods and services
when their income increases, but will buy less
if their income decreases , thus, affecting the
demand for goods and services.

2. Population. More people means more

demand for goods and services. Less population
means less demand for goods and services
 DETERMINANTS OF DEMAND
3. Tastes and Preferences. Demand for goods and services
increases when people like or prefer them. When certain product
is out of fashion , the demand for it decreases.

4. Price Expectations. When people expect the prices of goods,

especially basic commodities like rice, soap, cooking oil, or
sugar to increases tomorrow or next week, they will buy more of
these goods.
 DETERMINANTS OF DEMAND
5. Prices of Related Goods. When the price of a
certain good increases, people tend to buy substitute
products (products that have equal value or
substitute). But for complimentary goods (products
that go together or consumed at the same time) either
one of them increases in price, the demand for other
product decreases.
 DETERMINANTS OF DEMAND
5. Prices of Related Goods.
a) Substitute goods
• goods that can be used in place of other goods. E.g.
margarine and butter
• Demand of a good if price of substitute goods.
• Demand of a good if price of substitute goods.
 DETERMINANTS OF DEMAND
5. Prices of Related Goods.
b) Complementary goods.
• goods that are used together with another good. E.g: car and
petrol.
• Demand of a good if price of substitute goods.
• Demand of a good if price of substitute goods.
• E.g: when the price of car increases, the demand of car will
……….and the petrol consumption will ………..
 CHANGES IN DEMAND

It refers to the shift of demand curve

which is brought about by the changes
in the determinants of demand.
SAMPLE OF ELASTIC DEMAND
INELASTIC DEMAND
UNIT ELASTIC OR UNITARY DEMAND:
CHANGES IN DEMAND
CHANGES IN DEMAND
CHANGES IN DEMAND