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Demand Curve
Demand Curve
Demand Curve
Demand Curve
Demand Curve
Demand Curve
Demand Curve
Demand Curve
Demand Curve
Demand Curve
Demand Curve
Demand Curve
Demand Curve
Demand Curve
Demand Curve
Demand Curve
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Demand Curve

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Its about demand curve for consumers and the related to different factors

Its about demand curve for consumers and the related to different factors

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  • 1. Demand Curve
  • 2. Topics
    Linear Function
    Definition of Demand
    Definition of Demand Function
    Generalized Demand Function
    Factors Affecting Demand Function
    Slope Parameters
  • 3. Linear Function
    Definition
    An algebraic equation in which the highest degree term in the variable or variables is of the first degree. The graph of such an equation is a straight line if there are two variables.
    In linear equation there are two variable names independent variable and dependent variable.
  • 4. Linear Equation Cont…
    A common form of a linear equation in the two variables x and y is
    y = mx + c
    Where 'x' and 'y' are the coordinates of the points that satisfy the function and so lie on the straight line graph.
    'm' is the gradient of the straight line graph, and
    'c' is the 'y intercept' of the straight line graph.
  • 5. Linear Equation Cont…
  • 6. Definition of Demand
    Demand is the amount of goods and services that consumers in a market are willing and able to purchase during a given period of time
  • 7. Definition of Demand Function
    A Demand Function expresses quantity demanded as a function of product price
    The relation between price and quantity demanded per period of time, when all other factor that affects consumer demand are held constant, is called a demand function
    A Demand function can be expressed in a most general form as the equation
    Qd = a – bP
    Where Qd is quantity demanded
    a is intercept
    b is slope (b = Qd/P)
  • 8. Generalized Demand Function
    Quantity Demanded
    Qd= a + bP + cM + dPR+ eT + fPe + gN
    b, c, d, e, f and g are slope parameters
    P = Price of the goods or services
    M = Consumers Income
    PR = Price of related goods or services
    T = Taste pattern of consumers
    Pe = Expected price of the goods in some future period
    N = Number of Consumers in the market
  • 9. Factors Affecting Demand Function
    P = Price of the goods or services
    Qd= a + bP + cM + dPR+ eT + fPe + gN
    There is an inverse relation between the Quality demanded
    Here the slope is negative i.e. b is negative
  • 10. Factors Affecting Demand Function
    M = Consumers Income
    Qd= a + bP + cM + dPR+ eT + fPe + gN
    Direct for normal goods (c is +ve)
    Inverse for inferior goods (c is –ve)
  • 11. Factors Affecting Demand Function
    PR = Price of related goods or services
    Qd= a + bP + cM + dPR+ eT + fPe + gN
    Direct for substitutes (d is +ve)
    Inverse for complements (d is -ve)
  • 12. Factors Affecting Demand Function
    T = Taste pattern of consumers
    Qd= a + bP + cM + dPR+ eT + fPe + gN
    It has the direct relation (e is +ve)
  • 13. Factors Affecting Demand Function
    Pe = Expected price of the goods in some future period
    Qd= a + bP + cM + dPR+ eT + fPe + gN
    It has the direct relation (f is +ve)
  • 14. Factors Affecting Demand Function
    N = Number of Consumers in the market
    Qd= a + bP + cM + dPR+ eT + fPe + gN
    It has the direct relation (g is +ve)
  • 15. Factors Affecting Demand Function
  • 16. Thank You

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