Presented by ` Amit Dhama ` Amit Kumar Singh

Demand analysis ` Demand- supply- market ` Law of demand ` Demand schedule and Demand curve ` Demand determinants ` Engel¶s Curve ` Types of demand

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³Teach a parrot to say, µDemand and Supply,¶ and you have an economist!´

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Demand Effective demand Supply Market

The Law of demand states that ³higher the price, lower the demand, and vice versa´, other things remaining the same. More formally : ´The quantity of a well-defined good or service that people are willing and able to purchase during a particular period of time decreases as the price of that good or service rises and increases as the price falls, everything else held constant´.

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Inverse relationship Price, an independent variable, and demand, a dependent variable Other things remain the same Reasons underlying the Law of Demand Income effect Substitution effect

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Veblen effect In case of speculative market The Giffen Case

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Discrete depiction of demand (in a tabular form) of a particular good at different points of time.
Price
Rs 50 Rs 60 Rs 70

Quantity demanded
90 80 70

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A demand curve is simply a graph of the demand schedule. ³that measures price on the vertical axis and quantity of demand on the horizontal axis´
d 70

p r i c e

60 50 d1

Quantity demanded

70

80

90

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Price The tastes of preferences of consumers The no of consumers in the market The money income of the consumers The prices of the related goods, (substitutes and complimentary) Consumer expectations with respect of future prices and incomes Advertisement of the product, and so on«.

Consumer goods/ Producer goods Perishable/Durable Autonomous/ Derived Individual/Market Firm/Industry

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Class notes Economics by Campbell R McConnell Textbook of Economics by Willaim Boyes and Michael Melvin Managerial Economics by R L Varshney and K L Maheshwari