PAGE

Sr. No. TITLE

NUMBER
1. Acknowledgement 2
2. Supervisor’s Certificate 3
3. Table of Contents 4
4. Research Methodology 5
5. Chapter1- Concept of Demand 6-10
1.1. Demand and Quantity Demanded
1.2. Demand Schedule: Individual and Market Demand
Schedule
1.3. Demand Function
6. Chapter2- Demand Curve and its Slope 10-12
2.1. Individual Demand Schedule
2.2. Market Demand Schedule
2.3. Slope of Demand Curve
7. Chapter3- Law of Demand 12-16
3.1. Assumptions of Law of Demand
3.2. Explanation of Law of Demand
3.3. Exceptions to Law of Demand
8. Chapter4- Movements along the Demand Curve and Shifts in 16-20
Demand Curve
4.1. Tabular and Diagrammatic Illustrations
9. Chapter5- Case Study Analysis: Rise of Smartphone Market in 20-24
India
10. Chapter6- Conclusion 25
11. Bibliography 25-26

1
 RESEARCH METHODOLOGY

1. Hypothesis Formed-
The exploration, fact-finding and analysis of the project were started keeping
in mind the hypothesis that ‘Law of Demand is a very essential element in the
discipline of Economics. Hypothesis was also formed on the basis of the
importance of the concept of demand on the economy.
2. Research Questions-
The research questions formed in this project are, ‘What is the concept of
demand?’ and ‘What is the Law of Demand and its applicability in the real
life?’ With the help of this project we try to understand the meaning as well as
the applications of the concept of Law of Demand by going through and
critically examining a case study of ‘Rise of Smartphone Market in India.’
3. Research Gap-
Even though the Law of Demand is a technical concept yet during the
research, a great scarcity of data was encountered to better comprehend and
understand the Law of Demand.
4. Research Methodology applied-

Various sources have been used for the completion of this project. Sources ranging
from journals, authentic and famous books along with authoritative websites and
publications have been read and visited. Therefore, a vast context on the concept and
Law of Demand is tried to provide.

2
 1. CONCEPT OF DEMAND

Normally, both the terms desire and demand are used identically. But in the study of
economics, Demand has altogether a different meaning. Where desire and want are
meant as ‘wishful thinking’ and ‘desire along with the ability to pay’, demand is ‘the
desire along with the ability and willingness to pay.’ Supposing, you desire to buy a
computer, but you do not have the enough money to buy it, then this desire just
remains a wishful thinking and this will not be called demand. Now suppose that you
have the required money with you to buy the computer but you are not willing to
expend it on the computer, then in this case, demand does not emerge. Hence, desire
becomes demand only when you are willing to expend your money to buy the
computer. Thus, demand can be defined as the quantities of commodity which an
individual is able and willing to purchase, in a given market, in a given period of time
at various prices. Demand has been defined by various economists and other scholars
as:

Ferguson- “Demand refers to the quantities of a commodity that the consumers are
able and willing to buy at each possible during a given period of time, other things
being equal.”

According to Prof. Benham, “The demand for anything, at a given price is the amount
of it which will be bought per unit of time at the price.”

In the words of Prof. Hanson, “By demand is meant, demand at a price, for it is
impossible to conceive of demand not related to price.”

As per Prof. Hibdon, “Demand means the various quantities of goods that would be
purchased per time period at different prices in a given market.”

According to Prof. Mayers, “The demand for goods is schedule of the amounts that
buyers would be willing to purchase at all possible prices at any one instant of time.”1

1
‘Demand and Supply & Concept of Demand’, available at,
https://www.economicsdiscussion.net/demand/demand-and-supply-concept-of-
demand/3371, (last accessed on 6th December, 2020)
3
Features of demand include:

i. Price: It refers to the price of the commodity

ii. Time: It means per unit of time i.e. monthly, weekly, etc.
iii. Market: The market is a means by which the exchange of goods and services
takes place as a result of buyers and sellers being in contact with one another,
either directly or through mediating agents or institutions. It can be physical or
online market.
iv. Amount: It means the quantity demanded.

It is important to include all these terms in order to complete the definition of the
concept of demand.

1.1. Demand and Quantity Demanded

Demand for a commodity is always expressed with reference to price. For instance if
you ask someone that how much of Good-X will he buy, the obvious answer is likely
to be, “It depends upon the price of that commodity (Good-X).” Here comes the main
distinction between the terms of demand and quantity demanded- Demand refers to
the quantities of a commodity which consumers plan to buy at various prices of a
Good during a period of time whereas, Quantity Demanded is the amount of Good
which consumers plan to buy at a particular price.

Px Qx

(Price of Good-X) (Quantity Demanded

of Good-X)
(₹)
(Units)

1 4

2 3

3 2

Table 1

4
In the above table, 4 units of Good-X are demanded at ₹1 and 3 units of Good-X is
demanded at ₹2. This is known as ‘quantity demanded.’ Whereas, the entire schedule
reflects the ‘demand’.

1.2. Demand Schedule: Individual and Market Demand Schedule

Demand schedule is a table showing the relation between different quantities of a

commodity that are to be purchased at various prices of that commodity. According to
Samuelson, “The table relating to price and quantity demanded is called the demand
schedule.”

Individual Demand Schedule- It is a demand schedule of an individual consumer (of a

commodity) in the market. It is defined as a table showing different quantities of a
commodity that one particular consumer in the market is ready to buy at different
possible prices of the commodity at a point of time.

Market Demand Schedule: It is a table showing different quantities of a commodity

that all the consumers in the market are ready to buy at different possible prices of the
commodity at a point of time.2

Px Qx (Consumer Qx (Consumer Qx (Consumer

A) B) A+ Consumer
(Price of Good- B= Market
X) (Quantity (Quantity Demand)
Demanded of Demanded of
(₹) Good-X) Good-X) (Units)

(Units) (Units)

1 4 5 4+5=9

2 3 4 3+4=7

3 2 3 2+3=5

Table 2

In the above table the columns showing the relation shown between price of Good-X
and quantity demanded by consumer A alone is the Individual Demand Schedule.
Whereas, when we take into account the entire schedule, then we get the market
2
T.R. Jain, V.K. Ohri, “Intoductory Microeconomics”, 2018-19, VK Publications Pvt. Ltd., Delhi

5
schedule. In individual demand schedule, the consumer demands 4 units of Good-X
when the price is ₹1 whereas, the quantity demanded decreases from 4 to 3 units
when the price of the commodity increases from ₹1 to ₹2. Similarly, when the price
of Good-X rises, its market demand falls. When price is ₹1 per unit, A’s demand= 4
units and B’s demand= 5 units. Thus the total market demand at ₹1 is 9 units. But
when the price rises to ₹2 per unit, then the market demand falls to 7 units. Thus, the
inverse relation between price of the commodity and quantity demanded is established
in both individual and market demand as well.

1.3. Demand Function

Demand function expresses the functional relationship between demand and the
factors determining demand. Demand function is expressed as- Dx= f(Px,Y̅, P̅r, T̅, A̅E̅)
where Px is price, Y is income, P r is price of related goods, T is tastes and preferences,
AE is advertising expenditure, etc.

I. Own price of the commodity- Other things remaining constant, when there is
rise in own price of commodity, the demand contracts and when the price of
commodity falls, the demand extends. This inverse relation between price and
the demand of a commodity is called Law of Demand.
II. Income- Change in the income influences the consumer’s demand for
different goods. The demand for normal goods tends to increase and vice
versa. On the other hand, the demand for inferior goods like coarse grain
tends to decrease with the increase in income and vice versa.
III. Price of Related Goods- These are of two types and influence the demand of a
commodity.

i. Substitute Goods- These are those goods that can substitute each
other, such as tea and coffee, etc. Increase in price of one causes an
increase in the price of other and decrease in the price of one causes
decline in the demand of other.
ii. Complementary Goods- Complementary goods are those goods
which complete the demand for each other and are demanded
together, for example, bread and butter, etc. A fall in the price of one
causes increase in the demand for the other and a rise in the price of
one causes decrease in the demand for other.

6
 IV. Advertising Expenditure- It is the expenditure that is incurred on advertising a
commodity. The more expenditure is incurred on the advertising of the
commodity the more is the demand for that commodity and vice versa.
V. Consumer’s Expectations in regard to Future Prices- If the expected prices of
a commodity increases in the future then the demand for that commodity
increases in the present particularly, if the consumer fears an acute shortage of
that commodity in the near future and vice versa.
VI. Tastes and Preferences- The tastes and preferences have impact on demand. If
a consumer has particular taste and preference towards a commodity, the
demand of that commodity increases. Contrary to it, if taste and preference
for a product is fading, its demand will decrease.
VII. Population Size- The demand increases with increase in the number of buyers
for a commodity. For example, due to increase in the number of buyers, the
demand for cars has substantially risen in India.
VIII. Distribution of Income- Market demand is also influenced by the distribution
of income in the society. If redistribution of income causes inequality (rich
becoming richer and poor becoming poorer) then the demand for the luxury
goods is expected to increase. At the same time, if the income of the poor
falls, then the demand for the inferior goods like coarse grain may increase as
the fall in their income would compel them to shift from normal goods to
inferior goods.

2. DEMAND CURVE AND ITS SLOPE

Demand curve is the graphic representation of the demand schedule showing how
quantity demanded of a commodity is related to its own price. The concept of demand
curve includes: (i) Individual Demand Curve (ii) Market Demand Curve

2.1. Individual Demand Curve

Individual demand curve is a curve showing different quantities of a commodity that

one particular consumer in the market is ready to buy at different possible prices of
the commodity at a point of time. The graph below shows individual demand curve.
Y
In the diagram below, quantity of the commodity is shown X- axis and the price on Y-
axis. D is the demand curve. It is a graphic presentation of demand schedule, as in
Table 1.
40 a

30 b

20
 PRICE (₹)
c

D
X
0 10 20 30 40
QUANTITY (UNITS)

Demand curve slopes downward from left to right indicating inverse relation between
own price of the commodity and its quantity demanded. Higher price leads to a fall in
quantity demanded, lower price leads to a rise in quantity demanded of a commodity.

2.2. Market Demand Curve

Market demand curve is the horizontal summation of the individual demand curves. It
shows various quantities of a commodity that all the buyers in the market are ready to
buy at different possible prices of the commodity at a point of time. The diagram
below shows market demand curve. It is a graphic representation of market demand
schedule as in Table 2.
Y

a (2+3=5)
3

PRICE (₹)
2 b (3+4=7)

1 c (4+5=9)

D
0 X
0 1 2 3 4 5 6 7 8 9

QUANTITY (UNITS)

8
It is assumed that there are two buyers in the market. When price is ₹1 per unit, A’s
demand =4 units and B’s demand=5 units. Accordingly, market demand is 4+5=9
units when the price is ₹1 per unit. Likewise, when price is ₹4 per unit, market
demand is 1+2=3 units. Market demand curve also slopes downward showing inverse
relation between price of the commodity and its quantity demanded.

2.3. Slope of Demand Curve

Demand curve normally slopes downward, indicating inverse relation between price
of a commodity and its quantity.

Slope of demand curve is estimated as (-) ∆P/∆Q. It shows the ratio between change
in price corresponding to a unit change in quantity demanded of a commodity.
Negative sign indicates the inverse relation between price and quantity demanded of a
commodity. The diagram below shows a straight line demand curve DD’ is drawn,
indicating a linear demand function.

D’

∆P
PRICE c
b ∆Q

D
X
0 QUANTITY

Slope of demand curve= (-) ∆P/∆Q= ab/bc. It (income) is constant at all points on the
demand line DD’. Because DD’ is a linear straight line and slope of a straight line is
constant.

3. LAW OF DEMAND

Law of Demand is one of the fundamental concepts in subject matter of economics. It

was propounded by Alfred Marshall in his work ‘Principles of Economics’ published
in 1890. According to Marshall, “The Law of Demand states that amount demanded
increases with a fall in price and diminishes when price increases other things being

9
equal.” So, in other words there is an inverse relationship between price of the
commodity and its demand i.e. when the price of the commodity increases then the
demand for the commodity decreases and when the price of the commodity decreases
then the demand for the commodity increases. Thus the law of demand is a law
relating to the relationship between consumer demand for goods and services and
their prices. It works with the Law of Supply to determine how market economies use
the scarce means to determine the prices of goods and services. Marshall’s Law of
Demand also describes the functional relationship between demand and price. It can
be represented as:

Dx=f (Px) i.e. Demand for commodity ‘x’ is a function of Price of commodity ‘x’.

The functional relationship is inverse and negative as more quantity is demanded

when the price is less and less quantity is demanded when the price is more.

3.1 Assumptions of Law of Demand

Law of Demand holds true when ‘other things remain constant’ where other things
refer to the other factors determining demand, other than the price of the commodity.

Thus, the other factors that are assumed to be constant are:

1. Tastes and Preferences of the consumers- Tastes and Preferences of the

consumers are assumed to be constant because if the taste of a consumer
changes, then the preferences of the consumer will also change and this will
affect the demand.
2. Income: The income of the consumer is assumed to be constant because if the
income of the consumer increases then he/she would demand more even when
the price of the commodity is high, hence, making the law of demand invalid.
3. Price of Related Goods: The price of both supplementary as well as
complementary goods is assumed to be constant.
4. Consumer’s Expectations with regard to Future Prices: It is also assumed that
the consumer does not expect any significant rise or fall in the price of the
commodity in the near future.
5. Size and Composition of the Population: The size of population along with age
composition and gender ratio are assumed to be same because any changes in
any one of them can surely affect demand.

10
 6. The consumer is supposed to have full knowledge of the prices of the
commodities in the market.
7. Other factors: Other factors like advertisement expenditure, weather
conditions, etc. are also assumed to remain constant.

3.2 Explanation of the Law

The Law of Demand can be better explained with the help of a schedule and a graph.

Demand Schedule:

Px (₹) Qx (Units)

40 10

30 20

20 30

10 40

Table 3

The above schedule shows that the quantity demanded increases from 10 to 20 units
when the price of the commodity reduces from ₹40 to ₹30 per unit. Likewise,
quantity demanded increases from 20 to 30 units when the price of the commodity
reduces from ₹30 to ₹20 per unit.

Demand Curve:
Y

40 a

b
Price 30
(₹) c
20
d
10
D
0
X
0 10 20 30 40

Quantity (units)
11
In the above graphical representation, the demand curve D shows that the demand for
commodity-X extends from 10 to 20 units when the price of the commodity-X falls
from ₹40 to ₹30 and so on. In fact, downward slope of demand curve itself is an
expression of Law of Demand.

Demand Curve Slopes downward showing inverse relation between price of a

commodity and its quantity demanded due to the following factors:

1. Law of Diminishing Marginal Utility- According to this law, as consumption

of a commodity increases, marginal utility of each successive unit goes on
diminishing. Accordingly, for every additional unit to be purchased, the
consumer is willing to pay less and less price.
2. Income effect- Income effect refers to the effect on quantity demanded when
real income of the buyer changes owing to change in price of the commodity.
With a fall in price, real income increases. Accordingly, demand for the
commodity expands.
3. Substitution effect: Substitution effect refers to substitution of one commodity
for the other when it becomes relatively cheaper. Thus, when price of
commodity-X falls, it becomes cheaper in relation to commodity-Y.
Accordingly, X is substituted for Y. It is expansion of demand (for
commodity-X) due to substitution effect.
4. Different uses: A good may have several uses. Milk, for example, is used for
making curd, cheese and butter. If price of milk reduces, it will be put to
different uses. Accordingly, demand for milk expands.
5. Size of consumer group: When the price of a commodity falls, many more
buyers can afford to buy it. Accordingly, demand for the commodity expands.

3.3. Exceptions to Law of Demand

1. Veblen Effect- Thorstein Veblen propounded the doctrine of conspicuous

consumption. It is the consumption of luxurious goods. He meant that some
consumers measure the utility through price only. So, if more the price, more
is the utility. These goods are also known as Articles of Distinction. If there
prices fall, then they will no longer be considered as articles of distinction.
These goods have prestige attached to them. These goods are bought to

12
 display economic power. Precious diamonds, vintage cars can be cited as few
examples.
2. Ignorance/Irrational Judgement- Law of Demand fails when sometimes
consumers judge the quality of a good by its price. It is an irrational
judgement. Perhaps, it is owning to this huge price difference between
‘organic’ and the ‘non-organic’ products in the market, that the richer sections
of the society consider organic products of very high quality. Accordingly,
quantity demanded of these products has tended to rise even when their prices
are extremely high.
3. Giffen Goods- Giffen goods are highly inferior goods which show very high
negative income effect. As a result, when the price of such commodities falls,
their demand also falls, even when they happen to be cheaper than other
goods. This is known as ‘Giffen Paradox’.
4. War- If shortage is feared in anticipation of war, people may start buying for
building stocks or hoarding even when the prices rise.
5. Depression- During the time of depression, the prices of the commodities is
very low and the demand for the commodities is also less. This is due to the
lack of purchasing power with consumers.3

4. MOVEMENT ALONG THE DEMAND CURVE AND SHIFTS IN DEMAND

CURVE

Change in quantity demanded which shows the effect of change in price of

commodity, ceteris paribus, on its demand, is responsible for the movement along the
demand curve. Movements along the demand curve refer to the moving ‘up and
down’ the demand curve.

i. Extension of Demand: It refers to the increase in the quantity demanded due to

the fall in the price of the commodity, other things remaining constant. It is the
situation of buying more in response to decrease in the price of the
commodity. There is a downward movement along the demand curve during
extension of demand.

3
M.L. Jhingan, B.K. Jhingan, “microeconomics”, 2016, Vrinda Publications, Delhi

13
 ii. Contraction of Demand: It refers to the decrease in the quantity demanded due
to rise in the price of the commodity, other things remaining constant. It is the
situation of buying less in response to increase in the price of the commodity.
There is upward movement along the demand curve during contraction of
demand.

Shifts or change in the demand curve refer to all such situations when demand for a
commodity increases or decreases due to changes in other determinants of demand,
other than price of commodity.

i. Increase in Demand: A situation when demand curve shifts to the right is

known as a situation of increase in demand i.e. when more is purchased at the
same price of the commodity. It means rise in demand due to change in
factors other than price of the commodity and there happens a rightward shift
in demand curve.
ii. Decrease in Demand: A situation when demand curve shifts to the left is
known as a situation of decrease in demand i.e. when less is purchased at the
same price of the commodity. It means fall in demand due to change in
factors other than price of the commodity and there happens a leftward shift
in demand curve.

4.1. Tabular and Diagrammatic Illustrations Y

Movement along the demand curve/change in quantity demanded- A

3

Extension of Demand:
2
Px Qx
Px
(Price) (Quantity) (₹)
3 1 1 B
1 3
Table 4 D
0
X
0 1 2 3
Qx (Units)

14
In the above diagram, when the price of Good-X is ₹3 per unit, 1 unit is demanded.
When the price reduces to ₹1 per unit, demand extends to 5 units. Extension of
demand is indicated by a downward movement along the demand curve, as from point
A to B.

Contraction of Demand:

Px Qx
(₹) (Units)
1 3
3 1
Table 5

B
3

2
Px
(₹)
A
1

0 X
0 1 2 3

Qx (Units)

When the price of Good-X is ₹1 per unit, 3 units are demanded. When price rises to
₹3 per unit, demand contracts to 1 unit only. Similar to extension of demand,
contraction of demand is indicated by an upward movement along the demand curve,
as from point B to A.

Shifts in Demand Curve-

Forward Shift in Demand Curve:

Y
15
 Px Qx
(₹) (Units) D1 D2
10 20
10 30
Table 6
Px(₹)
A B
10 Price

0 X

0 10 20 30

Qx (units)

When the price of Good-X is ₹10 per unit, 20 units are demanded. Even when price
remains constant, consumers start demanding 30 units. It may be due to increase in
their income or shift in tastes in favour of the commodity, or other such factors. The
diagram shows demand curve shifting from D1 to D2 when the consumers decide to
buy 30 units (instead of 20) even when own price of the commodity remains constant
at ₹10 per unit. The consumer shifts from point A on D1 to point B on D2.

Backward Shift in Demand Curve:

Y
Px Qx
(₹) (Units) D2 D1
10 30
10 20
Table 7
Px(₹)
B A
10 Price

0 X
0 10 20 30
Qx (units)

16
When the price of Good-X is ₹10 per unit, 30 units are demanded. Even when price
remains constant, consumers start demanding 20 units rather than 30 units. It may be
due to decrease in their income or loss of tastes for the commodity, or other such
factors. The diagram shows demand curve shifting from D1 to D2 when the consumers
decide to buy only 20 units (instead of 30) even when own price of the commodity
remains constant at ₹10 per unit. The consumer shifts from point A on D1 to point B
on D2.

5. CASE STUDY ANALYSIS: RISE OF SMARTPHONE MARKET IN INDIA

With the coming up of science and technology, the modern world and society has
moved leaps and bounds. It has been 25 years down the lane when the first mobile
phone call was made between Kolkata and New Delhi in 1995. And now, India is the
second largest smartphone market. Mobile phones were expensive in those days as
much of the cost of the handsets was made by custom duty alone (around 60%).

Also, as mobiles did not have tracking systems or security measures at the time, it
was easy for burglars to swipe these devices from unsuspecting people and
households. As a result, with the rise of mobile phones and SIMs in India, the grey
market also grew.  People would often buy smuggled phones in the grey market for
half the price, since these devices did not include customs duty. Thus, the retail
market for mobile phones was split between legal sales of branded phones and sales
of smuggled handsets.4

Even though there was some momentum for the mobiles in the market, most of the
Indians still relied upon the landlines. And the two operating institutions that provided
the landline phone service in India are BSNL and MTNL. But in September 2004,
Indian mobile phone market achieved a major milestone. For the first time ever, the
number of mobile phone connections were more than the number of fixed line
connections.

Cut to 2014 — India has only two mobile manufacturing units. But, with internet
becoming cheaper, the entry of ecommerce in India, and the influx of Chinese brands
keen to sell at low prices, the demand for smartphones skyrocketed.

4
25 years of mobile phones: India’s journey to becoming world’s second-largest smartphone
market, available at, https://yourstory.com/2020/07/india-mobile-phones-smartphone-market-
25-years?utm_pageloadtype=scroll, (last accessed on 8th December, 2020)  

17
In December 2015, Mukesh Ambani-owned Reliance Jio was soft launched with a
beta for employees and partners. In September 2016, the service became
commercially available, launching 4G services with free data and voice call until
March 31, 2017. By February 2017, Jio had acquired 100 million subscribers. Its
entry in the market triggered a massive reduction in data prices across networks,
accelerating smartphone adoption all over India. Today, Jio is the largest mobile
network operator in India. In the same year, the production and assembly of
smartphones became a cornerstone of Prime Minister Narendra Modi’s ambitious
Make in India campaign. In July 2017, Mukesh Ambani made another strategic
announcement — the launch of JioPhone, a 4G handset that further changed how
Indians use mobiles.

In 2019, the number of smartphone manufactures in India grew from two to more
sixty. In the same year, India’s smartphone market surpassed United States for the
first time on an annual level.

Reaching 158 million shipments, it became the second-largest smartphone market,

second only to China. With the rise in the market of smartphones, this lead to rise in
the production and manufacturing of the smartphones which in return lead to decrease
in the average market price of the smartphones.

Indian consumer is getting more choices with more smartphone models available
across price ranges with the retail price of the entry level smartphone has fallen from
₹12,000 in 2009 to ₹ 1,400 in 2018. The average selling price (ASP) of smartphones
had reduced by 16 per cent to reach Rs 11,800 during the same period. The sale of
smartphones increased from 2 million units in 2009-10 to 117 million units in 2017-
18.5

5
‘Average selling price of smartphones in India down 16% in 10 years: ICEA-KPMG
report’, available at, https://www.thenewsminute.com/article/average-selling-price-
smartphones-india-down-16-10-years-icea-kpmg-report-99025, (last accessed on 9th
December,2020)

18
In November 2020, the average price of smartphones further reduced by 2% and
reached ₹11,500. According to market research firm techARC, India had 502.2
million smartphone users as of December 2019, which means over 77 percent of
Indians are now accessing wireless broadband through smartphones.6

The bar graphs below show the data regarding the average selling price of
smartphones in India from 2010 to 2019 and the

Source: statisca.com, at, https://www.statista.com/statistics/809351/india-smartphone-

average-selling-price/

6
‘Over 500 million Indians now use smartphones, 77 percent of who are online:
techARC’, available at, https://gadgets.ndtv.com/mobiles/news/over-500-million-
indians-now-use-smartphones-77-percent-of-who-are-online-techarc-2172219, (last
accessed on 9th December, 2020)
19
Source: researchgate.net, at, https://www.researchgate.net/figure/Number-of-mobile-
phone-users-in-India-from-2013-to-2019-in-millions-Ref-
statistacom_fig1_326379179

The demand schedule showing the average selling price and number of users of
smartphones for the years 2013, 2014 and 2015 is as given:

Px (Average Selling Price) Qx (No. of users of

smartphones) (in Millions)
174 524.9
138 581.1
132 638.4

20
 Table 8

Demand curve:

From the table and diagram above it can be stated that as the

200
180 A Demand Curve
160
B
140 C
120
100
80 Demand Curve
($)
Px

60
40
20
0
524.9 581.1 638.4
Q x (in Millions)

The schedule and the graph above show that when the average selling price (price) of
the smartphones decreased, in those years, the number of buyers (quantity demanded)
of the smartphones increased i.e. when the average selling price of the smartphones
decreased from $174 to $138, then the number of buyers of the smartphones (demand
for the smartphones )increased from 524.9 to 581.1 million. Thus holding the Law of
Demand true.

21
 6. CONCLUSION

Through this project we come to know about the Law of Demand, its concept and
application with the help of a case study on the Rise of Smartphone Market in India.
The case study made it more easier and interesting to better comprehend this Law.
The Law basically is about the relation, an inverse relation, between the price and the
demand of a commodity. Hence, whenever the price of a commodity rises, the
demand for that commodity falls and when the price of the commodity falls, the
demand for that commodity rises. This has been seen with the help of the case study.
when the average selling price (price) of the smartphones decreased, in those years,
the number of buyers (quantity demanded) of the smartphones increased i.e. when the
average selling price of the smartphones decreased, then the demand for the
smartphones increased.

7. BIBLIOGRAPHY

Books referred:

 T.R. Jain, V.K. Ohri, “Intoductory Microeconomics”, 2018-19, VK Publications

Pvt. Ltd., Delhi
 M.L. Jhingan, B.K. Jhingan, “microeconomics”, 2016, Vrinda Publications,
Delhi

Websites visited:

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 Demand and Supply & Concept of Demand’, available at,
https://www.economicsdiscussion.net/demand/demand-and-supply-concept-
of-demand/3371, (last accessed on 6th December, 2020)
 25 years of mobile phones: India’s journey to becoming world’s second-
largest smartphone market, available at, https://yourstory.com/2020/07/india-
mobile-phones-smartphone-market-25-years?utm_pageloadtype=scroll, (last
accessed on 8th December, 2020)
 ‘Average selling price of smartphones in India down 16% in 10 years: ICEA-
KPMG report’, available at, https://www.thenewsminute.com/article/average-
selling-price-smartphones-india-down-16-10-years-icea-kpmg-report-99025,
(last accessed on 9th December,2020)

 ‘Over 500 million Indians now use smartphones, 77 percent of who are online:
techARC’, available at, https://gadgets.ndtv.com/mobiles/news/over-500-
million-indians-now-use-smartphones-77-percent-of-who-are-online-techarc-
2172219, (last accessed on 9th December, 2020)

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