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# Law of demand and supply

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Law of demand and supply - Unitedworld School of Business

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### Law of demand and supply

1. 1. Demand Supply ApproachDemand Supply Approach
2. 2. Supply and Demand Analysis 1. The demand schedule 2. The demand curve 3. Demand shift s Elasticity of demand 4. Price elasticity of demand 5. C alculating elasticities 6. Elasticity and revenue 7. Income elasticity of demand 8. Cross elasticity of demand 9. Analysis of supply 10. The supply schedule 11. The supply curve 12. Behind the supply curve 13. Shift in supply 14. Pr ice elasticity of supply Equilibrium of supply and demand curves 15. Equilibrium with supply and demand curves 16. Effect of shift in supply or demand 17. Interpreting the changes in prices and quantity 18. Simultaneous shift in supply and demand 19. Rationing by prices A pplying supply and demand 20. Impact of a Tax on price and quantity Prices fixed by law 21. Minimum floor and maximum ceilings
3. 3. Demand FunctionDemand Function Amount of goods that a consumer is willing top buy and able to purchase over a period of time is known as quantity demanded for that good Flow concept Demand is relationship between price and quantity demanded other things remaining constant X1 = f {P1}
4. 4. Demand ScheduleDemand Schedule Price Quantity Demanded 500 10 lakhs 450 11 lakhs 400 12 lakhs 350 13 lakhs 300 14 lakhs 250 15 lakhs 200 16 lakhs 150 17 lakhs
5. 5. Demand CurveDemand CurvePrice Demand Demand Curve 0 Y X
6. 6. Law of DemandLaw of Demand Demand curve depicts the inverse relationship between price and quantity demanded Downward sloping Other things remaining the same, if the price of any good decreases its quantity demanded increases and vice versa Exceptions – Giffen Goods, Veblen effect, Future expectations, share market
7. 7. Factors influencing the Demand CurveFactors influencing the Demand Curve Prices of close substitutes and complements Income of the consumer Existing wealth of the consumer Change in the testes and preferences of the consumer Expectations regarding future changes in the prices Population Special influence – season, law
8. 8. Increase in Demand (Shift in demand curve)Increase in Demand (Shift in demand curve) An increase in income An increase in wealth An increase in prices of substitutes A decrease in the prices of complements A change in the taste and preferences in favor of good Expectations of a future increase in price of a good
9. 9. Increase in demandIncrease in demandY 0 X Old Demand Curve New Demand Curve Price Quantity Demanded
10. 10. Decrease in Demand (Shift in demand curve)Decrease in Demand (Shift in demand curve) An Decrease in income An Decrease in wealth An Decrease in prices of substitutes A Increase in the prices of complements A change in the taste and preferences against the good Expectations of a future decrease in price of a good
11. 11. Decrease in demandDecrease in demandY 0 X Old Demand Curve New Demand Curve Price Quantity Demanded
12. 12. Changes in Quantity Demanded vs. Changes in DemandChanges in Quantity Demanded vs. Changes in Demand Changes in quantity demanded P P2 P1 0 Q1 Q2 D D X Changes in demanded P P2 P1 0 Q1 Q2 D D D1 D1 X
13. 13. Campus OverviewCampus Overview 907/A Uvarshad, Gandhinagar Highway, Ahmedabad – 382422. Ahmedabad Kolkata Infinity Benchmark, 10th Floor, Plot G1, Block EP & GP, Sector V, Salt- Lake, Kolkata – 700091. Mumbai Goldline Business Centre Linkway Estate, Next to Chincholi Fire Brigade, Malad (West), Mumbai – 400 064.
14. 14. Thank YouThank You