Lesson Notes By Weeks and Term - Senior Secondary School 2

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  4. Principles of demand and supply

Term: 3rd Term

Week: 10

Class: Senior Secondary School 2

Age: 16 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:    Agriculture

Topic:-      Principles of demand and supply

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

  1. Define demand
  2. State the law of demand
  3. List some factors that affect the demand of agricultural production
  4. State the law of supply

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

PRESENTATION

TEACHER’S ACTIVITY

STUDENT’S ACTIVITY

STEP 1

INTRODUCTION

The teacher reviews the previous lesson on basic economic principles

Students pay attention

STEP 2

EXPLANATION

She defines demand and states the law of demand

Students pay attention and participates

STEP 3

DEMONSTRATION

She lists some factors that affect the demand of agricultural production  and also states the law of supply

 

Students pay attention and participate

STEP 4

NOTE TAKING

The teacher writes a summarized note on the board

The students copy the note in their books

 

NOTE

PRINCIPLES OF DEMAND AND SUPPLY

DEMAND

Demand means that quality of goods a consumer is willing and able to pay for at a particular time.

Law of Demand

The law of demand states that the higher the price the lower the quantity demanded or the lower the price the higher the quantity demanded.

The law of demand can only hold under the following conditions

  1. If the consumer’s taste does not change
  2. If his income remains constant
  3. There is no close substitute to the commodity
  4. If the habits of the consumer did not change
  5. If there is no change in the quality of the product

DEMAND SCHEDULE

This is the table showing the relationship between the quantity of commodity demanded and price

Price (N)                  Quantity Demanded (kg)

100                           10

80                             20

60                             30

40                             40

20                             50

 

DEMAND CURVE

This is the graph showing the relationship between price and quantity of a commodity demanded.

 

Factors Affecting Demand

  1. Price: If the price of any commodity is highs the demand for that commodity will be low.
  2. Price of close substitute: If the price of other commodities (substitute) is lower, the demand for that commodity will fall because the consumer may demand for the substitute
  3. Income of consumer: the higher the income of the consumer the higher the quantity of the commodity demanded
  4. Population Pressure: The increase in population will lead to the increase in the demand of a commodity
  5. Change in taste of the consumer: if he consumer’s taste change for a particular commodity, it will affect the demand of such commodity
  6. Feast or festive period: more or a commodity is demanded during feast and festive period.
  7. Expectation of change in price. If there is expectation of change in price of a commodity, demand will also change
  8. Taxation: An increases in taxation means a reduction in demanding power of some commodities

 

ELASTICITY OF DEMAND

This is the degree of responsiveness of demand to little change in price of goods and service

Elasticity =           Percentage Change in Demand                              

                               Percentage Change in Price

Types of elasticity of demand

  1. Elastic demand: demand is said to be elastic if little change in price leads to great change in demand of a particular commodity
  2. Inelastic demand – meaning that little change in price lead to slight change in quantity of goods demanded
  3. Unitary elastic demand: this is when a change in price lead to equal change in the quantity of goods and service demanded.
  4. Perfectly elastic demand: This is when change is prince brings about an infinite effect on quantity of goods demanded meaning that a slight increase in price can make customers stop purchasing the commodity and a slight decreases in prince can make consumers purchases all the commodity.
  5. Perfectly inelastic demand or zero elastic demand: this is when a change in price has no effect on the demand of such commodity.

 

SUPPLY

Supply is the quantity of goods and services a producer is willing and able to offer for sale at a particular time.

LAW OF SUPPLY

This law states that the higher the price of a commodity, the higher the quantity supplied and vice versa.

 SUPPLY SCHEDULE

This is also the table that shows the relationship between price and quantity supplied

Price (N)                  Quantity Demanded (kg)

100                           50

80                             40

60                             30

40                             20

20                             10

 

Supply Curve

This is also the graph that shows the relationship between price and quantity of goods supplied.

 

Factors Affecting Supply

  1. Price: If the price of a commodity is high producer will supply more and vice versa
  2. Cost of Production: If the cost of production a commodity is high, the producers will produce less and less will be supplied
  3. Weather condition: If the weather condition of a particular area favours the production of a particular product, more will be produced and supplied
  4. Government Policy: Subsidies given to farmers in form of free importation of equipments can increase production and supply
  5. Level of technology: Improved technology reduces cost of production and increases supply
  6. Taxation: An increase in taxation of materials used in production reduces production and supply
  7. Price of Substitutes: If the price of other commodities rise, the supply for that commodity will reduce
  8. Number of producer: If there are many producers for a particular produce, the price will fall and vice versa
  9. Natural disasters: Insects, flood, war, drought or fire can affect the supply and price of such commodity.

 

ELASTICITY OF SUPPLY

This is the degree of responsiveness of supply to little change in price of a commodity

 Elasticity =         Percentage Change in Supply

                             Percentage Change in Price

 

Types of Elasticity of Supply

  1. Elastic Supply: This is when a little change in price leads to a great change in supply
  2. Inelastic Supply: This is when a large change in price leads to a slight change in the quantity of goods supplied.
  3. Unitary Elastic Supply: This is equal change in price leads to an equal change in supply of a commodity
  4. Perfect elastic supply: this is when a change in price brings about a infinite effect on the quantity of goods supplied
  5. Perfect Inelastic Supply: This is when a change in price has no effect on the supply of a commodity.

 

Determination of Price by Demand and Supply

Buyers come to market with their money to buy while sellers come to the market with their goods to sell (demand and supply).

Market equilibrium is determined by the interaction between the buyers and the sellers. Equilibrium price is the price at which quantity demanded equal quantity supplied. At this pointy buyers and sellers are satisfied and there is no pressure on price.

Price                        Quantity Demanded        Quantity Supplied

5                                      100                           20

10                                     80                             40

15                                     60                             60

20                                     40                             80

25                                     20                             100

 

Implications of Demand and Supply on Agricultural Production

  1. When the demand for an agricultural product is higher than the supply, price will rise and producers will produce more.
  2. When the demand is lower than the supply, price will fall and producers will be discouraged is produce more
  3. High demand for a particular substitute may arise if the price of a commodity is high
  4. Higher taste of an agricultural produce may cause higher demand for that produce
  5. Increases in consumers income may lead to high demand for an agricultural product
  6. High cost of production may lead to low supply of a particular produce
  7. High cost and lack of farm input can lead to low supply of a produce
  8. Favorable climate and weather condition encourages high production and supply of produce and vice versa
  9. Increase in the number of producers increase supply and reduces price.

 

EVALUATION:   1. Define demand

  1. State the law of demand
  2. List some factors that affect the demand of agricultural                              production
  3. State the law of supply

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively