CONTENT

• Change in Quantity Demanded
• Change in Demand
• Change in Quantity Supplied
• Change in Supply
• Effects of change in demand and supply on equilibrium price and quant

CHANGE IN QUANTITY DEMANDED

A change in quantity demanded, is otherwise known as movement along a particular demand curve that is only influenced by price. When there is a change in the quantity demanded, the demand curve does not shift. This is because the price of the commodity is the only cause of a change in the quantity demanded while other factors remain unchanged. 

EVALUATION

1. What is change in quantity supplied?
2. State the factors responsible for change in supply.

EFFECTS OF CHANGES IN DEMAND AND SUPPLY ON EQUILIBRIUM PRICE AND QUANTITY

Changes in demand and supply lead to a change in the equilibrium price. Once there is any change in either demand or supply, the initial equilibrium will be disrupted and a new equilibrium will be created. The market equilibrium price can be affected in the following ways.

EVALUATION QUESTION

1. What is the equilibrium quantity?
2. Illustrate with a diagrammatic sketch the market situation at a price lower than the equilibrium price”
3. Explain with the aid of diagrams how the market equilibrium price is affected by the combined effects of:
4. Increase in demand and increase in supply.

b.    Decrease in demand and decrease in supply.

• Increase in demand and decrease in supply.

READING ASSIGNMENT

Amplified and Simplified Economic for SSS  by Femi Longe  page 290–296

Fundamentals of Economics by Anyawuocha page 166-168

GENERAL EVALUATION QUESTIONS

1. Distinguish between fixed cost and variable cost.
   1. Under what condition will a perfectly competitive firm maximize profit.
   1. Describe each of the following;

(a) abnormal demand               ( b) Effective demand  

• What is a public corporation.
  • Explain the causes of a declining population.

WEEKEND ASSIGNMENT

1. At the equilibrium price, quantity demanded is (a) greater than quantity supplied (b) equal to quantity supplied (c) less than quantity supplied (d) equal to excess supply
2. If the government fixes a price of a commodity above the equilibrium price, the quantity supplied will be (a) less than the quantity demanded (b) equal to the quantity demanded (c) greater than the quantity   demanded (d) equal to zero
3. The market price of a commodity is normally determined by the (a) law of demand (b) interaction of the forces of demand and supply (c) total number of people in the market (d) total quantity of the commodity in the market
4. The gap between demand and supply curves below the equilibrium price indicates (a) excess demand (b) excess supply (c) equilibrium quantity (d) equilibrium price
5. If prices fall below the equilibrium (a) demand will equal supply (b) demand will be greater than supply  (c) supply will be greater than demand (d) quantity supplied will be zero

SECTION B

1. Given the demand and supply function for a crate of eggs as follows:

Qd = 12 –2p;      Q = 3+1p

Determine the equilibrium price and quantity

• What is the excess supply at the price of N3.50?