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CHAPTER 2
Application of
Demand and Supply
LESSON 2.4
Market Structures
Chapter Learning Objectives
• To explain the law of supply and demand and
illustrate how equilibrium price and equilibrium
quantity are determined
• To discuss and explain the factors that affect
demand and supply
• To reason effectively how a change in demand or
supply or in both can affect equilibrium price and
equilibrium quantity
Chapter Learning Objectives
• To apply the principles of demand and supply to
illustrate how prices of commodities are determined
• To distinguish between elastic and inelastic demand
and supply
• To describe the characteristics and distinguish the
features of the market structures (perfect competition,
monopoly, monopolistic competition, and oligopoly)
Chapter Learning Objectives
• To relate population growth with the country’s labor
supply and apply the law of demand and supply in
the determination of wages of labor
• To deduce how the excess supply of labor has led
to the phenomenon of the Overseas Filipino Worker
• To analyze how demand and supply forces can
affect the value of the Philippine peso in relation to
foreign currencies
Chapter Learning Objectives
• To apply the law of demand and supply to Philippine
housing shortage and show how this has led to the
real estate boom in the country
• To understand how savings channeled into
investments can affect the economy
• To explain the concept of minimum wage
• To discuss why it is necessary for the government to
impose taxes
Terms to Remember in
Chapter 2
• Market • Shift of the curve
• Goods market • Supply
• Consumers goods • Supply schedule
• Labor market
• Cost of production
• Stock market
• Technology
• Demand
•
• Market equilibrium
Demand schedule
• Demand function • Equilibrium
• Demand curve • Equilibrium price
• Population • Equilibrium quantity
• Movement • Rent
• Price ceiling
Terms to Remember in
Chapter 2
• Elasticity • Monopolistic
• Elastic demand/supply competition
• Inelastic demand/supply • Non-price competition
• Unitary elastic demand/supply • Economies of scale
• Price elasticity of demand • Oligopoly
• Arc elasticity • Cross Price Elasticity of
• Income elasticity of demand Demand
• Normal good • Market structure
• Inferior goods • Perfect competition
• Monopoly • Imperfect competition
• Labor force or labor
supply
Terms to Remember in
Chapter 2
• Wage • Gross Domestic
• Minimum wage Product
• Labor migration • Gross Domestic
• Foreign exchange rate Production
• Real estate boom • Full-time workers
• Business process • Part-time workers
outsourcing (BPO) • Overseas Filipino
• Savings Worker
• Investment • Productive capacity
• Taxes • Resources
• Economic rent
• Public goods
Market Structure, Competition,
and Market
What is MARKET STRUCTURE,
COMPETITION, and MARKET?
• There are so many buyers and sellers that each has a negligible
impact on market price.
• A homogeneous product is sold by sellers, which means the
products are highly similar in such a way consumers will have no
preference in buying from one seller over another.
• There is perfect knowledge of economic agents of market conditions
such as present and future prices, costs, and economic
opportunities.
• Market price and quantity of output are determined exclusively by
forces of demand and supply.
Perfect Competition
The answer is yes, just like the market for wheat. The
model of perfect competition is powerful and many
markets, while not strictly perfectly competitive, come
reasonably close.
Imperfect Competition
• Monopoly
• Monopolistic competition
• Oligopoly
Imperfect Competition
What is an OLIGOPOLY?