Demand

Presented by: Fatima

CONTENTS
 DEMAND
 EXAMPLE / SCHEDULE
 LAW OF DEMAND
 EXAMPLE / SCHEDULE
 DETERMINANAT OF DEMAND
 INCOME OF THE CONSUMER
 CHANGE IN PRICE OF RELATED GOODS
 TASTE AND POPULATION
DEMAND
 Willingness and ability of a consumer to buy
goods and services at a certain price level
 For Example: • You have a desire to have a

Car, but you do not have enough money to

buy it. Then this desire will remain just a
wishful thinking, it will not be called demand.
• If inspire of having money, you do not want
to spend it on Car, demand does not emerge
• The desire become demand only when you
are ready to spend money to buy car
LAW OF DEMAND…
 There is inverse relationship between price
and quantity demanded when rest of the
things are constant.
Determinants of demand…
INCOME OF THE CONSUMER
 INCOME OF THE CONSUMER
 NORMAL GOODS
 INFERIOR GOODS
NORMAL GOODS:
 Normal goods are those goods where income
effect is positive. It means if income of the
consumer are increases as a result their
demand is also increases and vice versa
INFERIOR GOODS:
 Inferior goods are those goods where income
effect is negative it means if income of the
consumer is increases as a result their
demand are decreases and vice versa they
have inverse relationship between income
and demand
CHANGE IN PRICE OF RELATED
GOODS
 SUBTITUTION GOODS
 COMPLEMENTERY GOODS

 SUBTITUTION GOODS: Substitute goods are those

goods in which can be used in place of other goods.
EXAMPLE:
 Tea and coffee
 7up and sprite
 Cook and Pepsi
 Pen and pencil
 There is a direct relationship between price of tea and
demand of coffee.
COMPLEMENTARY GOODS
 Complementary goods are those goods which
can be used with each together. EXAMPLE:
 Ink and marker
 Cell and watch
 Car and petrol Both are dependent to each

other
 There is an inverse relationship between price

of petrol and demand of car

 THANK YOU
For your attention