Alfred Ajibola
- Mon, 09th September, 2019 @ 2:50 PM
Topics in Economics
Types of capital market: Primary market and secondary market Capital market explained with its functions Basic tools for economic analysis: Graphs explained with its characteristics and importance Basic tools for economic analysis: Tables explained with its characteristics and importance Factors affecting population in economics Advantages of Inflation Disadvantages of Inflation Concept of Inflation in Economics Scheme of work for Economics, SS1, First Term Scheme of work for Economics, SS1, Second Term Scheme of Work for Economics, SS1, Third Term Functions of the Wholesaler Advantages and Disadvantages of the Wholesaler Wholesale Market: Who is a Wholesaler? Characteristics of the Wholesaler Retail Market: Who is a Retailer and Examples of Retailers Market: Types of Market What is a Market in Economics? Elasticity of supply explained with its types Supply Elasticity: Elasticity of Supply explainedAcademic Questions in Economics
_____ is defined as a gradual and sustained rise in price level of goods and services in relation to their availability.
A. Basis Point Rate
B. Hike Rate
C. Elastic Supply
D. Elasticity of Price
E. Price Inflation
F. Aggregate Supply
The wholesalers can bring about an economy of scale.
A. True
B. False
Which of the following statement isn't a characteristics of the wholesaler?
A. They may have to operate in specific areas or regions accorded them by the producer
B. They are often popular in the line of goods they supply
C. They are not risk bearers
D. They have good storage facilities
E. They often pay for goods supplied by the manufacturers in advance
F. They usually have business agents or brokers
The wholesalers act as the middlemen in supply chain.
A. True
B. False
Large retailers who buy directly from manufacturers are termed as _____.
A. Wholesale Retailers
B. Certified Retailers
C. Codified Retailers
D. Commodity Retailers
E. Manufacturers Retailer
F. Conspicuous Retailers
_____ is a market whereby the sellers buy goods in lesser quantities from the wholesalers and sells in bits to the final consumers.
A. Commodity
B. Retail
C. Wholesale
D. Labour
E. Common
F. General
Which of the following is not a financial market?
A. Money Market
B. Bond Market
C. Foreign Exchange Market
D. Virtual Market
E. Capital Market
F. Stock Exchange Market
A _____ market provides a platform whereby job seekers link up with employers in an attempt to be hired.
A. Wholesale market
B. Bond market
C. Physical market
D. Virtual market
E. Factor Market
F. Labor Market
Demand is one of the forces that govern the market system. The other is supply. It is important to state that price is a factor determined by demand and supply respectively.
Please read on supply, supply curve and law of supply here.
Everyone is always in demand for something at various points in their everyday life. For instance, you probably had demanded for data by your network provider before you could read this article on Len Academy.
Demand is defined as the willingness of a person, buyer or consumer to buy a specific quantity of goods or services at a given price and time.
Various professors have given their own version for the definition of demand. Common to their definitions is the ideology that: 'There is a desire supported by the ability and willingness of a buyer to pay for a particular product at a specific price and time'.
Please read on demand schedule here.
Below are definitions of demand from the perspective of some notable professors:
The demand for goods is a schedule of the amounts that buyers would be willing to purchase at all possible prices at any one instant of a time.
Professor Mayers
Demand is the various quantities of goods that would be purchased per time period at different prices in a given market.
Professor Hibdon
The demand for anything, at a given price is the amount of it which will be bought per unit of time at the price.
Professor Benham
From the above definitions, we can infer that the definition of demand is referenced to three major factors. These are:
You can read on the graphical representation of supply curve here.
Demand (sometimes called effective demand) is not the same as desire, want or need. This is true because the desired (which could be wanted or needed) goods and services may not be bought, especially due to the limitation by price and the availability of money at that point in time.
From the above explanation, we can therefore state that effective demand is the ability to pay for a product.
You can read on scale of preference and opportunity cost here.
Another term that exists is latent demand and derived demand.
Latent demand is when the buyer intends to buy goods or services but lacks the purchasing power; and as a result cannot buy the intended goods or services. Think of it as an unaccomplished demand.
Derived demand is a term used when the demand of a product is required because a related product had been purchased. For instance, If product A is related or connected to product B, the demand of product A will likely result to the demand of product B.
In the above instance, Product A could be mobile phones while product B may be SIM cards.
You can read on the concept and types of cost here.
The demand for a specific product in the market is governed by the law of demand.
The law of demand states that an increase in price will result to a decrease in the demand of a product while a decrease in price will result to an increase in the demand of a product, as far as other factors remains constant.
Meanwhile, understand that the law of demand holds true under the following assumptions:
Below is a graph that shows the Law of Demand for Wheat:
The law of demand remains valid in the sense that:
When given the choice of 2 similar products with the same price; (assuming all other factors remain constant or the same), you will prefer/choose to buy that with a lower price. This is the concept of Ceteris Paribus Assumption.
You can read on balance of payment deficit and balance of payment surplus here
According to the market structure, the buyers make up the demand side for a product while the seller constitutes the supply side of products.
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Amazing facts in Economics
Notable points in Economics
A unitary elasticity of supply is seen when a change in price brings about a corresponding and proportional change in the quantity of goods or services supplied.
The graph below shows a unit elasticity of supply:
Below is an instance of a unitary elasticity of supply:
If a 100% increase in the price of wheat translates into a 100% increase in the production and supply of wheat, then the supply elasticity is said to be unitary elastic and its value is equal to 1.
Unitary elasticity is always equal to 1, that is: Es = 1
The supply curve runs diagonally and will pass through the center.
Supply elasticity is defined as the rate at which an increase in price of goods translates into its increased production and availability in the market. Supply elasticity is also termed as price elasticity of supply.
Consider the statements below:
If a 100% increase in the price of rice translates into a 100% increase in the production and supply of rice, the supply elasticity is said to be unitary elastic and its value is equal to 1.
If a 100% increase in the price of rice translates into a 50% increase in the production and supply (quantity) of rice, the supply elasticity is said to be inelastic and its value will be greater than zero and less than 1. In this case, the exact value is 0.5: (value of change in the quantity of rice divided by value of change in price of rice = 50/100 = 0.5).
The individual demand schedule is a table that shows the demand of a commodity that an individual (consumer) purchased at various prices, and at a particular time.
The table below shows an individual demand schedule:
|
Price in Naira (of a tuber of yam) |
Quantity demanded (per week) |
|
500 |
5 |
|
400 |
10 |
|
300 |
15 |
|
200 |
20 |
|
100 |
25 |
The market demand schedule is also referred to as an aggregate demand schedule, total demand schedule or composite demand schedule.
This is a table that shows the different commodities purchased by all the consumers or customers in the market.
The market demand schedule is the summation of the individual demand schedules, showing the demand of different customers for a commodity at a particular price. It is shown in the table below:
|
Unit price of commodity (Naira) |
Quantity demanded by consumer A (QA) |
Quantity demanded by consumer A (QB) |
Market demand (QA + QB) |
|
50 |
20 |
15 |
35 |
|
40 |
40 |
30 |
70 |
|
30 |
60 |
45 |
105 |
|
20 |
80 |
60 |
140 |
|
10 |
100 |
75 |
175 |
From the above table, notice that when the unit price of the commodity was 50 Naira, consumer A demanded 20 quantities while consumer B demanded 15 quantities.
Below are definitions of demand from the perspective of some notable professors:
The demand for goods is a schedule of the amounts that buyers would be willing to purchase at all possible prices at any one instant of a time.
Professor Mayers
Demand is the various quantities of goods that would be purchased per time period at different prices in a given market.
Professor Hibdon
The demand for anything, at a given price is the amount of it which will be bought per unit of time at the price.
Professor Benham
Generally, demand is defined as the willingness of a person, buyer or consumer to buy a specific quantity of goods or service at a given price and time.
From the above definitions, we can infer that the definition of demand is referenced to three major factors. These are:
Quantity of Goods Demanded
Price
Time