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AND LAW OF
DEMAND
Nikhil 97
Jun-98
Vaidehi-99
Nikita- 100
Vishakha-101
Pooja-102
Types Of Demand .
Price Demand
Income Demand
Cross Demand :
i) Complementary
Goods.
ii) Substitute Goods.
Joint Demand
Derived Demand
Collective Demand
Essential elements of
demand
There must be a desire for a particular
commodity.
Desired commodity must be available in the
market.
Consumer must have sufficient amount of
money and he is ready to spend to purchase the
commodity.
The demand must be expressed at a particular
price.
The demand must be expressed at a particular
time.
Explanation of law of
demand
EXPLAINS RELATIONSHIP BETWEEN
PRICE AND DEMAND OF A
COMMODITY.
DEMAND DECREASES PRICE
INCREASES AND DEMAND
INCREASES PRICE INCREASES.
INVERSE RELATION BETWEEN PRICE
AND QUANTITY DEMANDED.
Price of
commodity
Quantity
Demanded
10
10
12
Mr. X Mr. Y
Mr. Z
Total Market
Demand
10
40
20
12
26
10
14
32
10
12
16
38
12
14
18
44
Assumptions of law of
demand
Income of the consumer remains constant
Shift in Demand
Changes in
quantity
demanded.
Expansion of
demand Increase
in demand (due to
fall in prices).
Contraction in
demand
Decrease in
demand (due to
rise in prices).
Changes in
demand
Increase in demand
Shift in demand
curve towards right.
Decrease in
demand- Shift in
demand curve
towards left.
Exceptions to law of
Demand
Giffins Paradox
Conspicuous necessities
Commodities of prestige
Expectations of future changes in
price
Emergencies
Determinants of Demand
Prices of commodity
Income of consumers
Price of related goods
Habits and tastes
Size of population
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