ECO 1013: CLASS REFLECTION WEEK 3

Assalamualaikum boys and girls 

Soo kita dah habis week 3 dah yeay. dah nak balik raya cina dah hehe 

Masa week 3 ni sir Amir ajar slow je so hm saya bnyk mengantuk maa.. input tu mcm kurang je haha sorry sir 

In week 3, kitorg masuk bab baruu 

CHAPTER 2: PRICING THEORY

DEMAND

1. Definition of Demand the ability and willingness to buy.
2. Law of Demand have negative (-) relationship between price of product, P and quantity demanded, Qd. If P increases, then Qd decreases.
   
3. Individual demand relationship between Qd by a single and its P
4. Market demand relationship between total of singles of Qd and its P. It is the combination of individual demand.
5. Determinants of demand (factors that influence the demand)

Price of related goods

 Substitute goods where if P of product A increases, they will change to other product such as product B. If P of product A increases, the Qd for product A decreases (LAW OF DEMAND). Thus, they will look for other altenatives leading Qd for product B increases.

Complementary goods goods are used together with another product. Eg. Car and petrol. If P of car increases, Qd for petrol decreases

Consumers income is when income increases, consumers demand of goods and services also increases.

 Normal goods  goods that increase in demand when income increases. Eg, Cars, shirts and books.

Inferior goods goods that decreases in demand when income increases. Eg, used cars, salt fish and low grade rice.

 Taste and fashions is when the product is fashionable, the demand increases. If product becomes outdated, demand will decreases.

 Population is when the Qd of product depends on the population size, If population size is big, then Qd of product increases

 Festive season and climatic condition is when the Qd of product depends on its season

 Price expected is when the P of product are going to rise in future, they buy more before the P rises.

6. Movement along and shift in the supply curve

SUPPLY

1. Definition of Supply The ability and willingness to sell
2. Law of supply positive relationship between price of product, P and quantity supplied, Qs. If P increases, then Qs increases.
   
3. Individual supply relationship between Qs by single seller and its P
4. Market supply relationship between total Qs by all seller and its P
5. Determinant of supply

Price of related goods

 Substitute goodsSupply of product will decrease if there is an increase in the price of substitute product. Eg. Qs of product A will decrease if P of product B increases. When P of product A increases, the Qs of of product A will increase (LAW OF SUPPLY). Thus Qs of product B decreases

Complementary goods An increase in P of a product will increase the Qs of complimentary product.

Cost of production  is when the cost of production increase, Qs will decrease (vice versa)

 Expected future price is when the seller expects the P will increase in future, the current Qs will be decrease (vice versa)

 Technological advance is the existence of new technology will cut the cost of production.

 Number of sellers is when large firm supplying product, the Qs of the product will increase

6. Movement along and shift in the supply curve

Thanks for reading !

 P/S: Extra video on Demand and Supply