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DEMAND And SUPPLY and Income elasticity of DEMAND

Of GARMENT INDUSTRIES IN INDIA

Vaibhav yadav 11llb064 section -B

INDEX


  

What is demand What is supply What is equilibrium Exception of demand and supply Income Elasticity of demand Garment industries in India

Demand
DEMAND
Quantity of goods and services that people are ready to buy at various prices within same period of time.
LAW

OF DEMAND

Whenever the price decrease demand increases.
NON

PRICE DETERMINENT OF DEMAND
Taste and preferences, Income, No. of buyers, Future expectation, Price of related good
Garment

Industries follow the law of demand and demand increases on seasonal clothes.

Demand curve

SUPPLY
SUPPLY Quantity of goods and services that people are ready to sell at various prices within same period of time
Law

of supply

whenever the price decreases supply increases.
NON

PRICE DETERMINENT OF SUPPLY
Cost and technology, income of customer, rise of substitute goods or price of complimentary goods, future expectations, no. of sellers, whether conditions
Garment

supply increases at the starting new season .

Supply curve

EQUILIBRIUM
The

price that equate the quantity demanded within the quantity supplied OR It also defines as the price which clear the condition of either surplus or shortage.
IN

EQUILIBRIUM the garment industry is in a state in which supply and demand is on constant level.

Equilibrium curve

Exception to the law of demand and supply

Giffen goods
Giffen good is one which people paradoxically consume more of as the price rises, violating the law of demand. In normal situations, as the price of a good rises, the substitution effect causes consumers to purchase less of it and more of substitute goods. In the Giffen good situation the income effect dominates, leading people to buy more of the good, even as its price rises.


Veblen goods
Veblen goods are a group of commodities for which people's preference for buying them increases as their price increases, as greater price confers greater status, instead of decreasing according to the law of demand. A Veblen good is often also a positional good.

Income elasticity of demand
Income elasticity of demand measures the relationship between a change in quantity demanded for good X and a change in real income.  The formula for calculating income elasticity: % change in demand divided by the % change in income
 

Garment industry follow the income elasticity of demand –people prefer to buy garments according to their income.

Normal and inferior goods
ACCORDIND TO THE CONCEPT OF DEMAND AND INCOME -THE GOODS ARE DIVIDED INTO

NORMAL GOODS

INFERIOR GOODS

Demand increase with increase in income

Demand decrease with decrease in income

Generally garments fall in the category of normal goods

Some of the leading Garment industries of India
     

Flying machine Cantabil Numer Uno Marks and Spencer KOUTONS LEVIS STRATUS
All these garment industries follow the law of demand and supply and follow the income elasticity of demand. Garment industries generally use the concept of SALE to increase the sales of the garments.

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