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Arris Cristever Evarola

BSCOEIV

Define the FF.

1. MARKET - A market is any place where the sellers of a particular good or service can meet with the

buyers of that goods and service where there is a potential for a transaction to take place.

2. MARKET DEMAND - Theaggregate of thedemands of all potentialcustomers (marketparticipants)for

a specificproduct over a specificperiod in a specific market.

3. LAW OF DEMAND - A microeconomic law that states that, all other factors being equal, as the price of

a good or service increases, consumer demand for the good or service will decrease and vice versa.

4. DEMAND SCHEDULE - In economics, the demand schedule is a table of the quantity demanded of a

good at different price levels. Thus, given the price level, it is easy to determine the expected quantity

demanded.

5. DEMAND CURVE - Ineconomics,the demand curve is thegraph depicting the relationship between

the price of a certaincommodity and the amount of it that consumers are willing and able to purchase

at that given price.

6. MARKET SUPPLY - The total supply of every seller willing and able to sell a good.

7. SUPPLY SCHEDULE - A table which contains values for theprice of a good and the quantity that would

be supplied at that price. If the data from the table is charted, it is known as asupply curve.

8. SUPPLY CURVE - A graph showing the hypotheticalsupply of aproduct orservice that would

beavailable at differentprice points. Thesupply curve usually slopesupward,since

higherprices giveproducers anincentive to supply more in the hope ofmaking greaterrevenue.In

theshort run the price-supply tradeoff is greater than in thelong run.

9. MARKET EQUILIBRIUM - A situation in which thesupply of an item is exactly equal to itsdemand.

Since there is neithersurplus norshortage in the market, price tends to remainstable in this situation.

10. DEMAD AND SUPPLY SCHEDULE - is aneconomic model ofprice determination in amarket.

ANSWER THE FF. QUESTION

1. WHAT IS MARKET? HOW DOES IT FUNCTION?

You will need consumers and producers and a land or a place for them to trade, in the modern world

money and products are used to be traded.

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2. HOW MANY THE LAW OF DEMAND BE DESCRIBED

the law of demand is an economic law, which states thatconsumers buy more of a good when its price

is lower and less when its price is higher (ceteris paribus).

3. WHAT DOES THE DEMAND CURVE SHOW

The level of demand for a product or service. When coupled with a supply curve you find the theoretical

market clearing price, which is the maximum you can charge to sell all units at the highest price at the

current level of demand.

4. WHAT ARE THE NONPRICE DETERMINANTS OF DEMAND

The following list enumerates the non-price determinants of demand. These factors are important,

because they can change the number of units sold of products and services, irrespective of their prices.

The determinants are:

Branding. Sellers can use advertising, product differentiation, customer service, and so forth to create

such strong brand images that buyers have a strong preference for their goods.

Market size. If the market is expanding rapidly,customers may be compelled to purchase based on

other factors than price, simply because the supply of goods is not keeping up with demand.

Demographics. A change in the proportions of the population in different age ranges can alter demand

in favor of those groups increasing in size (and vice versa). Thus, an aging population will increase the

demand for arthritis drugs.

Seasonality. The need for goods varies by time of year; thus, there is a strong demand for lawn mowers

in the Spring, but not in the Fall.

Available income. If the amount of available buyer income changes, it alters their propensity to

purchase. Thus, if there is an economic boom, someone is more likely to buy, irrespective of price.

Complementary goods. If there is a price change in a complementary item, it can impact the demand for

a product. Thus, a change in the price of popcorn in a movie theatre could impact the demand for

movies.

Future expectations. If buyers believe that the market will change in the future, such as may happen

with an anticipated constriction of supplies, this may alter their purchasing behavior now. Thus, an

expected constriction in the supply of rubber might increase the demand for tires now.

These determinants will alter the demand for goods and services, but only within certain price ranges.

For example, if non-price determinants are driving increased demand, but prices are very high, it is likely

that buyers will be driven to look at substitute products.

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5. WHAT DOES A SHIFT TO THE LEFT OF THE DEMAND CURVE SIGNIFY?

A shift in the demand curve is when people stop wanting something. They stop buying it. So, a shift in

the demand curve. It could be the opposite of course

6. WHAT IS A SUPPLY SCHEDULE?

Amethod used to show the differentamounts of a certainproduct or item that

acompany wouldneed tosupplybased on differentprice points.

7. WHAT ARE THE NONPRICE DETERMINANTS OF SUPPLY

8. WHAT IS THE EFFECT OF A TAX INCREASE IN THE ORIGINAL SUPPLY CURVE?

Tax authorities usually require either the buyer or the seller to be legally responsible for payment of thetax. Tax incidence is the way in which the burden of a tax is shared among the market participants (who

bears the cost?). Taxes will typically constitute a greater burden for whichever party has a more

inelastic curvee.g., if supply is inelastic and demand is elastic, the burden will be greater on the

producers.

9. WHAT IS THE EQUILIBRIUM PRICE?

Themarket price at which thesupply of an item equals thequantity demanded.

10. WHAT HAPPEN WHEN THE PRICE SET BELOW THE EQUILIBRIUM PRICE?

When the market price of a good or service rises above equilibrium on its own, the number of buyers

exhibiting demand for it is reduced. The only thing left for the maker of such a good or service to do is to

drop the price to restore the level of demand necessary to make an optimal profit. This sounds contrary

to simple arithmetic, but the fact is that the equilibrium is the price at which consumers get the best

deal and suppliers earn the most profit.

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