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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 • Equilibrium
• Demand function • Equilibrium price
• Demand curve • Equilibrium quantity
• Population • Rent
• Movement • Price ceiling
Terms to Remember in
Chapter 2
• Elasticity • Monopolistic
• Elastic demand/supply competition
• Inelastic demand/supply • Non-price competition
• Unitary elastic • Economies of scale
demand/supply • Oligopoly
• Price elasticity of demand • Cross Price Elasticity of
• Arc elasticity Demand
• Income elasticity of demand • Market structure
• Normal good • Perfect competition
• Inferior goods • Imperfect competition
• Monopoly • Labor force or labor
supply
Terms to Remember in
Chapter 2
• Wage • Gross Domestic
• Minimum wage Product
• Labor migration • Gross Domestic
Production
• Foreign exchange
rate • Full-time workers
• Real estate boom • Part-time workers
• Business process • Overseas Filipino
outsourcing (BPO) Worker
• Savings • Productive capacity
• Investment • Resources
• Taxes • 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?