 MARKET – a place where buyer and sellers interact and engage in

exchange.
 DEMAND – reflects the consumer’s desire for a commodity.
 QUANTITY DEMANDED – the amount of goods or services
consumers are willing and able to buy/purchase at a given price,
place, and at a given period of time.
 SUPPLY – defined as the maximum units/quantity of goods or
services producers can offer.
 QUANTITY SUPPLIED – refers to the amount of quantity of goods
and services producers are willing and able to supply at a given
price, at a given period of time.
 AGGREGATE DEMAND – the totality of a group of consumer’s
demand.
 AGGREGATE SUPPLY – the totality of a group of producer’s
supply.
 DEMAND SCHEDULE – the quantities consumers are willing to buy
of a good at various prices.
 SUPPLY SCHEDULE – the quantities producers are willing to
offer for sale at various prices.
 MOVEMENT ALONG THE CURVE – a change from one point to
another on the same curve.
 SHIFT OF THE CURVE – a change in the entire curve caused by
a change in the entire demand or supply schedule.
 NON-PRICE FACTORS – also known as parameters, are factors
other than price that also affect demand or supply.
 DEMAND FUNCTION – shows how quantity demanded is
dependent on its determinants.
 SUPPLY FUNCTION – shows how quantity supplied is
dependent on its determinants.
 EQUILIBRIUM – condition of balance or equality.
 1. Price of the good itself.
 2. Consumers income or Average income of
consumers - consumers tend to buy more goods and
acquire more services when their income increases.
 RESPONCE TO A CHANGE IN INCOME DEPENDS ON
THE TYPE OF GOODS:
 A. NORMAL GOODS= refers to a good for which
quantity demand at every price increases when
income rises.
 B. INFERIOR GOODS= refers to a good for which
quantity demand falls when income rises. Example:
Public transportation as the income increases, they
stop riding this public mode of transportation and
instead drive their own car.
 3. Consumers expectation of future prices. - when
someone expects higher prices in the future especially for
basic commodities, the tendency is to buy more of these
goods today.
 4. Prices of related commodities/goods or Price &
availability of related goods- changes in the prices of
alternative goods such as pork and chicken will affect the
quantity of fish demanded.
 SUBSTITUTE GOODS= are goods that can be used in place
of other goods. Example coffee substitutes for tea.
 COMPLEMENTARY GOODS= are gods that go together.
 =they are related in such a way that an increase in the
price of one good will cause a decrease in the demand for
the other good. For example: car and gasoline.
 5. Consumers tastes and preferences.
 6. Population or size of market- an increase
in the population means more demand for
goods and services.
 7. Special influences - there are certain
developments that influence demand for
certain goods and services. Heat and
humidity, for instance, contribute to the
demand for air-conditioning equipment and
light clothing.
 1. CHANGE IN TECHNOLOGY - state of the art
technology that uses high-tech machines
increases the quantity supply of goods which
causes the reduction of cost of production.
 2. COST OF INPUTS USED OR COST OF
PRODUCTION - an increase in the price of an
input or the cost of production decreases the
quantity supplied because the profitability of
certain business decreases.
 3. EXPECTATION OF FUTURE PRICE - when
producers expect higher prices in the future
commodities, the tendency is to keep their goods
and release them when the price rises.
 4. CHANGE IS THE PRICE OF RELATED GOODS
 5. GOVERNMENT REGULATION AND TAXES -it is
expected that taxes imposed by the government
increases cost of production which in turn
discourages production because it reduces
producers' earnings and will translate to lower
supply in the market.
 6. GOVERNMENT SUBSIDIES - or the financial
aids/assistance given by the government reduces
cost of production which encourages more
supply.
 7. NUMBER OF FIRMS IN THE MARKET OR NUMBER
OF SUPPLIERS.