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Group I

DEMAND
DEMAND
What is demand?
What is the 'Demand Schedule?
What is demand curve?
The Law of Demand?
What Are the Five Determinants of
Demand?
Shifts in demand?
What is demand?
Demandrefers to how much (quantity) of a
product or service is desired by buyers. The
quantity demanded is the amount of a
product people are willing to buy at a
certain price; the relationship between price
and quantity demanded is known as the
demand relationship
Types of demand.
Individual and Market Demand:
Organization and Industry Demand:
Autonomous and Derived Demand:
Demand for Perishable and Durable Goods:
Short-term and Long-term Demand:
1.Individual and Market Demand
Individual demand can be defined as a
quantity demanded by an individual for a
product at a particular price and within the
specific period of time
market demand is the aggregate of
individual demands of all the consumers of a
product over a period of time at a specific
price, while other factors are constant
2.Organization and Industry
Demand.
Refers to the classification of demand
on the basis of market. The demand
for the products of an organization at
given price over a point of time is
known as organization demand.
3. Autonomous and Derived Demand
Refers to the classification of demand on the
basis of dependency on other products. The
demand for a product that is not associated
with the demand of other products is known
as autonomous or direct demand. The
autonomous demand arises due to the
natural desire of an individual to consume
the product.
4. Demand for Perishable and
Durable Goods
Refers to the classification of demand on the
basis of usage of goods. The goods are divided
into two categories, perishable goods and
durable goods. Perishable or non-durable
goods refer to the goods that have a single
use. For example, cement, coal, fuel, and
eatables. On the other hand, durable goods
refer to goods that can be used repeatedly.
5. Short-term and Long-term
Demand
Short-term demand refers to the demand
for products that are used for a shorter
duration of time or for current period
The long-term demand of a product depends
on a number of factors, such as change in
technology, type of competition, promotional
activities, and availability of substitutes.
The short-term and long-term concepts of
demand are essential for an organization to
design a new product.
What is the 'Demand Schedule?
is a table of thequantity demandedof a
good at different price levels. Given the
price level, it is easy to determine the
expected quantity demanded
EXAMPLE:
PRICE OF PRODUCT QUANTITY OF PRODUCT
SMART PHONE DEMANDED
3,000 17

4,000 15

5,000 13

6,000 11

7,000 9

8,000 7

9,000 5

10,000 3

11000 1
demand curve
thegraphdepicting the relationship between
the price of a certaincommodityand the
amount of it that consumers are willing and
able to purchase at any given price. It is a
graphic representation of a
market demand schedule
EXAMPLE:

PRICE
DEMAND

QUANTITY
The Law of Demand
The law of demand states that, if all other
factors remain equal, the higher the price of
a good, the less people will demand that
good. In other words, the higher the price,
the lower the quantity demanded
The law of demand is so intuitive that you may not
even be aware of all the examples around you.
When shirts go on sale, you might buy three
instead of one. The quantity that you demand
increases because the price has fallen.
When plane tickets become more expensive,
youre less likely to travel by air and more
likely to choose the less expensive options of
driving or staying home. The amount of plane
tickets that you demand decreases to zero
because the cost has gone up.
What Are the Five
Determinants of Demand?
The price of the good or service.
Population size

Incomeof Consumers.

Tastes or preferences of consumers.


Expectations. These are usually about
whether the price will go up.
1.The price of the good or
service
a. Substitute goods (those that can be used to
replace each other): price of substitute and
demand for the other good are directly related.
Example: If the price of coffee rises, the demand
for tea should increase.
b. Complement goods (those that can be used
together): price of complement and demand for
the other good are inversely related.

Example: if the price of ice cream rises, the


demand for ice-cream toppings will decrease.
2.Population size

An increase in the nUmber of buyers would


cause demand to increase. As population
rises, the demand for products all other
comudities is expected to increase. a decline
in population will result in reduction in
demanded.
3. Incomeof Consumer.
A rise in a persons income will lead to an
increase in demand (shift demand curve to
the right), a fall will lead to a decrease in
demand for normal goods. Goods whose
demand varies inversely with income are
called inferior goods (e.g. Hamburger Helper).
2.Taste and Preferences of
Consumer
Favorable change leads to an inceases in
demand, unfovorable change lead to
decrease
5. Expectations.
a. Future price: consumers current demand
will increase if they expect higher future
prices; their demand will decrease if they
expect lower future prices.
b. Future income: consumers current
demand will increase if they expect higher
future income; their demand will decrease if
they expect lower future income.
Shifts in demand
The position of the demand curve willshift
to the left or rightfollowing a change inan
underlying determinantof demand.
Increases in demand are shown by a shift to
the right in the demand curve. This could be
caused by a number offactors, including a
rise in income, a rise in the price of a
substitute or a fall in the price of a
complement.
Example
BARNUEVO,LOUIE RENZ AMINO,NASROLA
TACADAO, JUSTINE MAE FLORES, HOREL JHON
VILLAPA,MARK DARYL RAMOS,
CASABUENA, KIVEN MAPANGAL,MORSHID
OMOS, CRISMA ZAINAL,NOEL
TINTENA, RACHALE ANN LUMILIS,DATUMANOT
LLANTO,KENNETH JOHN MALAGIANON
YEE,MICHAEL MAMEDTED,KENKEN
GALMAK,NORHAYA FEO,RAINALYN
TORRES,DARWIN FAJANOY,ANNALIZA
SAMSON,ZOREN BIANG,AILEE
HUELA,JOHN MARK DIAMANTE,
PINTOKASAN, MANIGPOL,
KIRI,PATAH
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