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Introduction • Man wants to buy a car but he does not have sufficient money to pay for it • A rich miserly person wants to buy a car but is not willing to pay for the car • A person has sufficient money and is willing to pay the price of the car .
Basics • The term Demand implies a „ desire for a commodity backed by the ability and willingness to pay for it‟ • A want with 3 attributes Desire to buy Willingness to pay Ability to pay Why do we say this??? .
What does this imply??? • The Annual Demand for LED TV‟s in Delhi at an average price of Rs60.000 .What does this imply??? .000 per piece is 10.Basics • Demand for LED TV is 50.000 .
Basics • The Quantity demanded of a commodity • The price at which a commodity is demanded • The time period over which a commodity is demanded • The market area in which a commodity is demanded .
Demand Function • Expresses the functional relationship between the demand for the product and its various determining variables • Dx= f( Px.Yd.u ) .N.T.Ps.A.Pc.
. A supply function is a behavior function for producers. Economics is a “Behavioral science” in that it describes the behavior of economic agents. A demand function is a behavior function for consumers.
holding constant all other determinants of demand. . – The Independent variable is the good‟s own price.The Demand Curve • The demand curve for any good shows the quantity demanded at each price. – The Dependent variable is the quantity demanded.
Demand slide 9 .The Law of Demand The Law of Demand says that a decrease in a good‟s own price will result in an increase in the amount demanded. holding constant all the other determinants of demand. The Law of Demand says that demand curves are negatively sloped.
e.. be negatively sloped. own price demand quantity demanded .A DEMAND CURVE A demand curve must look like this. i.
size. . fashion.Income.Assumptions • No change in C. age composition and sex ratio of the population No change in the range of goods available to the consumers. weather conditions.price of related goods. preferences. distribution of income. government policy.
Demand Curve can never have an upward slope. Do you agree?? • Giffen Goods • Articles of snob appeal • Speculation • Consumer‟s bias .
Factors Influencing Market Demand • • • • • • • • • • Price Distribution of Income and wealth Scale of preference Spending habits No. Advertisement and sales propoganda . of buyers and population growth Age structure and sex ratio Future Expectations Level of tax structure Inventions and Innovations Fashion. Climate . Customs.
Identify the major factors influencing demand for • Ice Cream • Sugar • Ball pen • Designer Jeans .
Income and Cross Demand .Demand Distinctions Consumer‟s goods and Producer‟s goods Perishable and Durable goods Industry and Company Demand Short run and Long run Demand Joint and Composite Demand Price .