Lecture Notes on Wants, Demands, Supply & Quantity | Microeconomics | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

EXPLAIN THE DIFFERENCE BETWEEN WAN
DEMANDS, AND QUANTITY DEMANDED? SUPPLY AND QUANTITY SUPPLIED? NOVEMBER 12, 2021 GROUP 1
63D National Economics University Table of Contents I.
EXPLAIN THE DIFFERENCE BETWEEN WANTS, DEMANDS, AND QUANTITY DEMANDED? ........................................................ 1.
WANTS: ........................................................................................................................................................................................... 1 2.
DEMANDS: ....................................................................................................................................................................................... 1 3.
QUANTITY DEMANDED: ....................................................................................................................................................................... 1 II.
EXPLAIN THE DIFFERENCE BETWEEN SUPPLY AND QUANTITY SUPPLIED? ................................................................................. 2 1.
WHAT IS SUPPLY? .............................................................................................................................................................................. 2 2.
WHAT IS THE QUANTITY SUPPLIED? ....................................................................................................................................................... 3 3.
COMPARISON TABLE BETWEEN SUPPLY AND QUANTITY SUPPLIED ................................................................................................................. 3 III.
GROUP MEMBERS ................................................................................................................................................................. 3
I. Explain the difference between wants, demands, and quantity demanded? 1. Wants: - Definition:
o Wants are directed by our surroundings towards reaching certain needs. Therefore human’s wants
can be varied depending on each individual’s perception, environment, culture, and society.
o For example, an American needs food but he may want a hamburger, fried potato, and beer; a
Chinese needs food but he may want a bowl of noodles and a cup of hot tea. Cloths are required
for a person to cover himself but we can see people wearing jeans, suit just because of cultural influence. 2. Demands: - Definition:
o Demands are requests for specific products that the buyer is willing to and able to pay for. - What is it?
o Demand refers to the graphing of all the quantities that can be purchased at various prices. - Change:
o When a person talks about an increase or decrease in demand, it means the change in demand. - Reasons:
o Changes in demand are due to factors other than prices, income, the price of complementary
goods, the price of substitutes, etc - Measurement of change:
o Changes in demand will result in a shift in the demand curve.
- Consequences of change in actual price: o No change in demand. - For example:
o Luxury cars, 5-star hotels, etc. Many people want a BMW, but only a few can buy one. So, one must
measure not only how many people want their product, but also how many are willing and have the ability to buy it. 3. Quantity demanded: - Definition:
o Quantity demanded represents the exact quantity (how much) of a good or service is demanded
by consumers at a particular price. 1
o Quantity demanded is a term used in economics to describe the total amount of a good or service
that consumers demand over a given interval of time. It depends on the price of a good or service
in a marketplace, regardless of whether that market is in equilibrium. - What is it?
o It is the actual amount of goods desired at a certain price. - Change:
o If a person talks about expansion or contraction of demand, he refers to the change in quantity demanded. - Reasons:
o Changes in quantity demanded are due to price. - Measurement of change:
o Movement along a demand curve.
- Consequences of change in actual price:
o Change in quantity demanded. - For example:
o At the price of $5 per hot dog, consumers buy two hot dogs per day; the quantity demanded is two.
If vendors decide to increase the price of a hot dog to $6, then consumers only purchase one hot
dog per day: the quantity demanded moves from two to one when the price rises from $5 to $6. If
however, the price of a hot dog decreases to $4, then customers want to consume three hot dogs:
the quantity demanded moves from two to three when the price falls from $5 to $4.
So, the key difference between wants and is desire. Consequently demands , people, who can afford a
desirable product are transforming their wants into
. In other words, if a customer is willing demands and able to buy a need or a w , it means that t ant
hey have a demand for that need or want.
Whereas the fundamental difference between demand and is that quantity demanded
while demand simply denotes the willingness and a person’s ability to purchase. As against
this quantity demanded represents the amount of an economic good or service desired by consumers at a fixed price.
II. Explain the difference between supply and quantity supplied? 1. What is supply?
- The meaning of the word supply in economics is that the services or the items that are provided by a
firm or company to the customers. Supply is one of the most complex parts of economics, filled with
mathematical formulas, graphs, and equations. The supply can be meant to be any goods, services, labor factors.
- Supply is the graph plotted between quantity and price. The graph called the supply curve consists of
different types of quantity and all types of prices available at that time in the market. The supply curve
is drawn by taking all the possible prices and may be available quantities in mind...
- For example, If the demand for a certain vegetable in the market increases, the farmer will try to
maximize the sale of that item to gain profit. So, as a result, they will increase the production level of
that particular vegetable in the farm rather than those vegetable which as less in demand.
- With the increase in the supply in respect to the normal supply, the curve starts to shift rightwards.
This happened when the quantity supplied increases with the market prices as well. On the other hand,
the supply curve shifts towards the left when the market prices, as well as the quantity, decreases. 2
2. What is the quantity supplied?
- The term quantity supplied refers to a particular intersection point in the supply curve between a
particular price and a specific quantity. It also refers to the number of goods or services a provider
wants to provide at a certain market price.
- For example, a ticket house wants to sell 1000 tickets at a price of Rs.20/-. And the same house is also
ready to sell 750 tickets for a price of Rs.10/-. So here, the provider wants to provide a particular
amount of tickets at a specific amount of rupees. This process is called quantity supplied when a
specific amount is supplied at the amount set by the provider as per their own needs.
- The quantity supply also differs from the total supply. Quantity supply is very sensitive to the market
price rates. When the price rate is higher, the quantity supplied is nearly the total supply. But when the
prices are lower, the quantity supplied has a high range difference with total supply.
3. Comparison table between supply and quantity supplied Parameters of Supply Quantity supplied Comparison Definition
It is based on all the available
It considers a particular quantity and a specific quantities and market prices. price. Effect on curve Movement of the curve in
Movement of the curve upward or downward. rightward or leftward Effect on factors Abruptly affects the factors.
Negligibly affects the factors. due to shifting of the curve Factors of
Factors on which supply depend
Factors on which quantity supplied depend are dependence
are technical problems, price of
income, economic crisis, competition among
raw materials, natural disasters, similar products, etc. etc. Types I. Increase in supply. I. Expansion of supply II. Decrease in supply II. Contraction of supply Symbol S Qs Example
After harvest, man A gained a total
After harvest, man A decided to sell 10 tons of
of 50 tons of rice and 5 tons of
rice with $370 per ton and 5 tons of potatoes potatoes and decided to spend
with $37.59 to $50.68 per ton; put 50 tons of these for commerce. rice left into the warehouse.
- Both of these terms, supply and quantity supply, are interrelated. The quantity of supply is a factor of
the supply curve, but the supply entirely means the relation between the quantity and prices. The
supply is parallel to the word ‘demand,’ and quantity supply is parallel to the word ‘quantity demand.’
The supply also depends on the current economic situation of the society. The quantity supplied may
differ in different situations of the provider. Therefore to understand the quantity supplied, it is important to know the supply. III. Group members 3