HOLY TRINITY COLLEGE

Puerto Princesa City

HEALTH ECONOMICS
REPORTING ON
FACTORS THAT AFFECT
THE DEMAND CURVE
(January 13, 2009; 4:00 – 5:30 pm)

I. OBJECTIVES:
At the end of one hour discussion, the students will be able to:
1. Identify the factors affecting the demand curve.
2. Differentiate the said factors that affect the demand curve.
3. Distinguish demand curve through understanding the basic meanings of these
factors.
4. Learn its applications to their everyday lives.
5. Apply it to the health care in the Philippines after the discussion.
6. Integrate Christian values with these factors.

II. MATERIALS USED: Photocopy as visuals (see sample on the next page);
Cartolina (objective)

III. LESSON PROPER:

THE FACTORS THAT AFFECT THE DEMAND CURVE

A. OWN PRICE OF THE PRODUCT (meaning the value of things traded in a

marketing exchange, a measure of what must be given up in order to take
possession or use of something else.)

A HIGHER PRICE of a A LOWER PRICE of a

PRODUCT decreases the DEMAND. PRODUCT increases the
DEMAND.

Thus, inverse relation between the product and the quantity being demanded.

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 E.g. If the price of a popular branded T-shirt is Php 100.00, a lot of customers
will buy it. But if the price goes high as Php 900.00 for the said item, few will only
buy it.

B. AVERAGE INCOME (typical amount of money)

As the average income of people and households increases, the demand for
specific goods also increases.
HIGHER INCOMES make commodities relatively cheaper simply because
people have more money to buy goods and services.

E.g. Ana’s salary increased up to Php 10,000.00. Now she can buy the latest
brand of laptop computer she wanted.

C. POPULATION SIZE AND DEMOGRAPHICS (DEMOGRAPHIC DATA)

DEMOGRAPHY – concerns with the study of human population collectively. Its

population, size, composition, and distribution in the area.

POPULATION SIZE – the total number of people who inhabit an area, region, or
country, or the number of people in a particular group who inhabit an area.

DEMOGRAPHIC DATA (a.k.a. Demographics) – it is an information that shows the

statistics and he characteristics of human population.

As the population increases, more people will use commodities.

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 Remember: an increase in population generally increases the demand for
most products, and changes or shifts in population demographics will affect the
demand for specific products.

D. PRICES OF RELATED GOODS

o Substitute products are commodities that decrease the use of another

product when more of these other products are used. Remember, that they
change and move in the opposite direction.
E.g. (1) The price of MRT decreases. (2) Decrease of MRT fare results in
increased demand in MR. (3) Increase in demand for MRT results in decrease
in demand for aircon buses (substitute products).

o Complementary Products are commodities that decrease the use of

another product when less of the other complement is used and vice-versa.
Remember that they change in the same direction.
E.g. (1) the price of gasoline increases. (2) Gasoline price increase induces a
corresponding decrease in demand for such. (3) Decrease in demand for
gasoline also affects a corresponding decrease in demand for cars
(complementary product).

E. TASTE or PREFERENCE OF BUYERS

An influence buying decisions but it is more difficult to assess. Taste is a very
important factor in buying decisions of consumers.
E.g. Andrei prefers branded or signature jeans while Warren likes jeans
bought from the ukay-ukay.

F. OTHER PARTICULAR FACTORS

Climate and weather affect the demand for umbrellas and raincoats. Summer
increase the demand for halo-halo and ice cream. Fiestas affect the demand for
lechon, pancit and beer. Natural disaster and seasonality also affects the demand
curve.

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 E.g. During the summer season, Havainas slippers became a hit to customers
of all walks of life.

IV. EVALUATION:
1. What is the difference between substitute and complimentary
products?
2. How can you apply these factors to Health Care?
3. Can you give some other factor/s that is/are not given in our report?
4. Why is that the preference or taste of a buyer is seems so important?

REFERENCE
ECONOMICS IN HEALTH for the Allied Health Sciences
By Jonas D. Policarpio ©2006 C & E Publishing Inc.
Pages 33 to 37

The secret to productive goal setting is in establishing clearly defined

goals, writing them down and focusing on them several times a day
with words, pictures and emotions as if we’ve already achieved them.
~ Denis Waitley

E.L.A.