DEMAND

ANALYSIS
LAW OF DEMAND
DETERMINANTS
TYPES
 WHAT IS DEMAND ?
The demand implies “a desire for a
commodity backed by the ability and
willingness to pay for it.”

Demand consists of :--

 Desire to buy the product
 Ability to pay for the product
 Willingness to pay for the product
 LAW OF DEMAND
HIGHER THE PRICE, LOWER THE
DEMAND IS.
LOWER THE PRICE , HIGHER THE
DEMAND IS.
(when all other things remain constant)
Y

P
P
R
P1

I
C
E Q Q1
0 X
QUANTITY
 ASSUMPTIONS OF THE LAW

 No change in the income

of the consumer
 No change in the price
of the related goods
 No expectation of change
in prices in near future
 Consumer tastes and preferences remain same
 No substitute for the good is available
 Exceptions to the Law

The law of demand does not hold true in the

following cases :-
 Goods which are purchased only for specific
purposes like gold, diamond etc.
 In case of inferior and Giffin goods.
 In case of necessities
 In case of fear of shortage of the goods
Types of Demand
 DETERMINANTS OF DEMAND

 PRICE OF THE GOOD  CLIMATE AND

 PRICE OF RELATED WHEATHER
GOODS  CONSUMER
 INCOME OF EXPECTATIONS
CONSUMER  ADVERTISEMENT
 POPULATION EXPENDITURE
 TASTES AND  AVAILABILITY OF
PERFERENCES GOODS
 MONEY SUPPLY
Thank you

Submitted by :--
Pankaj Kaushal