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Sonia Singh
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1
Meaning of Demand
Conceptually, demand can be defined as the desire
for a good backed by the ability and willingness to
pay for it. The desire without adequate purchasing
power and willingness to pay do not become
effective demand and only an effective demand
matters in economic analysis and business
decisions.
Types of Demand
The demand for various commodities is generally
classified on the basis of the consumers of the
product, suppliers of the product, nature of
goods, duration of the consumption of the
commodity, interdependence of demand, period of
demand and nature of use of the
commodity(intermediate or final).
do come on
if the
demand for
termed as
Determinants of Demand
Own Price
Prices of related goods Substitutes
and Complements
Income
Tastes & Preferences
Expectations
Population
Other exogenous factors
Demand Analysis
Law of Demand There is Inverse relationship
between price and quantity demanded ceteris
paribus i.e.,other factors remaining constant.
Demand Schedule A list / table showing
quantity demanded of a good at different
prices, all other things being held constant
Qty (D)
Market demand
The sum of the demands of all the buyers in a
market.
The market demand curve is the horizontal
sum of the demand curves of all buyers in the
market
Market Demand
3.Consumer expectations:
4.Market trend: in the share market it is
noted that when the price of a particular
share rises its demand also increases to
some people and vice versa.
Changes in Demand
Change in demand
A change in the quantity that people plan to
buy when any influence other than the price of
the good changes
Price
D2
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Copyright Amity University
Quantity
What Is Supply?
Supply of a commodity refers to the various
quantities of the the commodity which a seller is
willing and able to sell at different prices in a
given market, at a point of time.
Supply is related to scarcity. Its only the scarce
goods which have a supply price; Goods which
are freely available have no supply price.
2. The
RESERVED PRICE
The price cannot fall below a certain point .In case the
price falls too much the supply of the product may be
stopped .The price below which the producer will not be
willing to sell is reserved price.
MARKET EQUILIBRIUM
Market equilibrium
Equilibrium price
Equilibrium quantity
Market Equilibrium
Only at
equilibrium
demand intersects
supply.
Market Disequilibria
Excess demand or
shortage exists when
quantity demanded
exceeds quantity
supplied at the
current
price.
To
eliminate
the shortage,
some consumers are
willing to raise the current
price.
Market Disequilibria
Excess supply or
surplus exists when
quantity supplied
exceeds quantity
demanded at the
current price.
Decreases in Demand or
Supply
B) demand; demand
C) Supply; demand
D)
Supply; supply
Answer:
C
A)
Demand; supply
B)
demand; demand
C)
supply; demand
D)
supply; supply
Answer:
A
A)
Price of the good
B)
Quantity
C)
Income
D)
Both A and B
Answer:
C
A)
fall, demand
B)
rise, demand
C)
fall, quantity demanded
D)
rise, quantity demanded
Answer:
C
A)
demand increases.
B)
demand decreases.
C)
quantity demanded decreases.
D)
quantity demanded increases.
Answer:
D
A)
a positive
B)
a negative
C)
either a positive or negative
D)
a constantly changing
Answer:
B
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