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Understanding Demand: Key Concepts Explained

The document defines demand as the quantity of a good or service that consumers will purchase at various prices, incomes, or prices of related goods. It states the law of demand, which is that as price increases, quantity demanded decreases, and vice versa. Various terms related to demand are defined, including demand schedule, demand curve, and market demand. Factors that can impact demand are identified as the prices of related goods, expected future prices, income, expected future income and credit, population, and preferences. The document asks if the law of demand can ever be broken.

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36 views1 page

Understanding Demand: Key Concepts Explained

The document defines demand as the quantity of a good or service that consumers will purchase at various prices, incomes, or prices of related goods. It states the law of demand, which is that as price increases, quantity demanded decreases, and vice versa. Various terms related to demand are defined, including demand schedule, demand curve, and market demand. Factors that can impact demand are identified as the prices of related goods, expected future prices, income, expected future income and credit, population, and preferences. The document asks if the law of demand can ever be broken.

Uploaded by

sandy shoul
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Study of Demand

By demand we mean the various quantities of a give commodity or service which consume
would buy in one market in a given period of time, at various prices, or at various income, or at
various price of related goods.
If you demand something, then you
i.
ii.
iii.

Want it,
Can afford it, and
Have made a definite plan to buy it.

The law of demand states:


Other things remaining the same, the higher the price of a good, the smaller is the quantity
demanded; and the lower the price of a good, the larger is the quantity demanded.
Various terms in demand:
Demand schedule: a table that shows possible combinations of prices and quantities demanded
of a product.
Demand curve: a graph that expresses possible combinations of prices and quantities demanded
of a product.
Market demand: the sum of all consumers quantity demanded for a product at each price.
Demand factors: factors that can cause an increase or a decrease in a products demand
Factors that determine demand are as follows:
i.
ii.
iii.
iv.
v.

The prices of related goods


Expected future prices
Income
Expected future income and credit Population
Preferences

Is law of demand broken?


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