Grade 9 EMS DEMAND AND SUPPLY

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1 Grade 9 EMS DEMAND AND SUPPLY TASK 1 Arrange and hold an auction in the classroom. TASK 2 1. Which items went for the highest price? 2. Why do you think so? 3. Which items went for the lowest price? 4. Why do you think so? P a g e 1

2 DEMAND Demand refers to what the customer wants and is measured by how much a person is prepared to pay for an article. TASK 3 The following table depicts the number of ice-creams that customers will demand at different prices: Price per ice-cream Quantity of ice-creams demanded R10 50 R8 100 R5 200 R What do you notice about the demand as shown in the above table? 2. Draw a Demand Curve on the graph below. 3. Answer the following questions based on the graph you have drawn: a) At R6 how many ice-creams will be demanded? b) What price will the supplier be able to charge if 250 ice-creams are demanded? P a g e 2

3 DEMAND CURVE 10 P 8 R I 6 C E QUANTITY P a g e 3

4 SUPPLY Supply refers to the manufacturer s side of the market and represents how many items a supplier is prepared to supply (sell) at different prices. TASK 4 The following table depicts the number of ice-creams that a supplier would be prepared to supply at different prices: Price per ice-cream Quantity of ice-creams supplied R R8 200 R5 100 R What do you notice about the supply as shown in the above table? 5. Draw a Supply Curve on the graph below. 6. Answer the following questions based on the graph you have drawn: a) At R7 how many ice-creams would the supplier be prepared to sell? b) If the supplier wished to sell 250 ice-creams what price would he be able to sell them for? P a g e 4

5 SUPPLY CURVE 10 P 8 R I 6 C E QUANTITY P a g e 5

6 TASK 5 Now let s combine the Demand and Supply curves on one graph. On the following graph copy your Demand and Supply curves for the ice-creams. 10 P 8 R I 6 C E QUANTITY P a g e 6

7 TASK 6 Mark the point on the above graph where the 2 curves intersect. This point is known as the Equilibrium Point or Market Point. This is the point where the Demand and Supply are equal. The price at this point is known as the Market Price. THE MARKET PRICE This is the price on the market where the demand and supply for a product are exactly equal. 1. How many ice-creams will be sold at the Market Price? 2. What price will the ice-creams be sold for at the market point? 3. If the supplier was to increase the price of the product what would happen to the demand? 4. If the supplier was to drop the price of the product what would happen to the demand? 5. At a price of R5 how many ice-creams would be demanded? 6. At a price of R5 how many ice-creams would be supplied? P a g e 7

8 TASK 7 Demand and Supply can change over time. Name 3 factors which might affect the demand for a product. Name 3 factors which might affect the supply of a product. TASK 8 Complete the following table by stating what effect each of the following events will have on the Demand for a product as well as the price of the product if the supply did not change. Product/Event Effect on Demand Effect on Price Winter clothes at the end of the winter season. Oil heaters during winter. Ronaldo s jersey at the beginning of the World Cup Luxury cars when petrol prices are high TASK 9 Complete the following table by stating what effect each of the following events will have on the Supply of a product as well as the price of the product if the demand did not change. Product/Event Effect on Supply Effect on Price Oil if he oil producing countries cut off the supplies of oil Fresh fish if an oil spillage destroys much of the fish life in the sea. Maize if farmers produce an excellent harvest. Cell phones if an extra supplier joins the cell phone industry. P a g e 8

9 TASK 10 Study the information given below. Scripto Ltd manufactures and sells ballpoint pens. The table below shows the market. Price Quantity demanded in millions Quantity supplied in millions R4, R3, R3, R2, R2, Illustrate this information on a graph. 4,00 P 3,50 R I 3,00 C E 2,50 2, QUANTITY IN MILLIONS P a g e 9

10 2. What is the Market Price for ballpoint pens? 3. What is the market equilibrium quantity for ballpoint pens? 4. Recently Scripto Ltd undertook a massive advertising campaign. The company predicts that this will increase the demand for ballpoint pens by 5 million at each and every price. Complete the following table using this new information. Price Old quantity demanded in millions New quantity demanded in millions Quantity supplied in millions R4, R3, R3, R2, R2, Add the new demand curve on the graph on the previous page. 6. What is the new Market Price for ballpoint pens? 7. What is the new market equilibrium quantity for ballpoint pens? P a g e 10

11 TASK 11 Study the following graph which deals with the demand and supply of school shoes and answer the questions that follow: D1 S1 P R I C E S QUANTITY IN MILLIONS D1 1. At R15, how many pairs of shoes would consumers want to buy? Why are producers not prepared to sell at this price? 2. How many pairs of shoes are suppliers willing to sell at R15? 3. How many pairs of shoes are sellers willing to sell at R45? Why are buyers not prepared to buy at this price? P a g e 11

12 4. How many pairs of shoes are sellers willing to sell at R30? 5. At R30 how many pairs of shoes would consumers want to buy? 6. What is the Market Price and market equilibrium quantity? P a g e 12