Managerial Economics – Lesson 1 & 2 - nagbago yung demand pero di

nagbabago yung price/non-price factors

Economics - example: income
 production of goods and services
 how to allocate limited resources DEMAND SHIFTERS
 how people make choices to reach their goals
while hinders by limitations Normal goods
 can be applied to the macro level - income increase shifts demand to the
 can be used for personal decisions to help you right, decrease shifts demand to the left
arrive to the best decision on how to achieve - normally buy pag mataas income
your goal - positive relationship
 time is a resource and is limited - pag mataas income mataas demand
 study on how to make choices when faced by and vice versa
limitations
Inferior goods
Concept of Opportunity Cost - income increase shifts demand to the
 options that are forgone left, income decrease shifts demand to
 you have various choices that will make you the right
satisfy your needs - binibili lang pag mababa income
 may halaga lahat ng mga bagay na hindi natin - example: NFA rice
pinili or hindi natin pipiliin - pag nagtitipid
- pag mababa income mataas demand
TYPES OF ECONOMICS and vice versa
1. Macro-economics
 economy as a whole Complement
 aggregate behavior of the whole economy - increase in the price of one good shifts
demand for the other to the left,
2. Micro-Economics decrease in the price of one good shifts
 individuals demand for the other to the right
 small community - use with a certain product
- creamer and coffee
Allocation of resources - pag tumaas price ng mismong product
 example: choosing which business to invest bababa yung demand
 meron bang bibili, ano ba market natin, choose
to use it in a way na di masasayang Substitute
- increase in the price of one good shifts
Price demand for the other to the right,
 important component of the market decrease in the price of one good shifts
 example: maraming nag-aaral sa BSU demand for the other to the left
because of price - positive yung relationship ng price ng
substitute at yung demand ng mismong
Satisfaction produkto
 fleeting concept of the market and temporary in
nature Taste and preferences
- change in how much people like a good
- advertising stimulates the
consciousness of consumers
TWO MARKET BEHAVIORS - example: Jollibee and Mcdonalds
- positive relation to demand
1. Demand Q d =8−2 P
 law of demand - the higher the price the lower Population
the demand and vice versa, negative - increase in population shifts demand to
interrelationship the right, and a decrease in population
shifts demand to the left.
Substitution effect - the makeup of the population also
- hahanap ng mas lower price na matters for some products
substitute

Change in demand or shift in demand

2. Supply Q s =2+2 P  the responsiveness of one variable to changes
 as price increases, quantity supplied increases. in another variable
as price decreases, quantity supplied
decreases.
d
 behavior of producers %∆Q
 producers' main goal is to gain profit
PED=
%∆P
 positive relationship with price

DETERMINANTS OF SUPPLY Q d 2−Q d 1

Changes in technology Q d1
PED=
- can lower your production P2 −P 1
- can increase your supply P1 ¿
¿
Changes in prices of inputs
- increase in the price of the inputs shifts Price Elasticity
supply to the left. decrease in the price  responsiveness of a quantity demanded to a
of inputs shifts supply to the right change in the goods own price
- pag mas mataas price ng inputs mas
mababa yung supply and vice versa Marginal Revenue
 the change in total revenue resulting from
Government regulations increasing quantity
- taxes affect the production (negative
relationship)
- subsidies (positive relationship)

Changes in the number of producers

- firms entering the market supply shifts
supply to the right. Firms exiting the
market shifts supply to the left
- mas maraming producers mas
madaming demand

Surplus

 mas maganda equal sa demand
 bawal mataas kasi yung limited resources ay
masasayang
 bababaan price

Shortage
 walang nasayang na resources
 resources should be maximized for the needs
and wants of consumers
 tataasan price

3. Equilibrium Q d =Q s

- price is such that quantity supplied

equals quantity demanded
- hard and impossible to come by

Demand and supply curve

4. Elasticity