DEMAND And SUPPLY andIncome elasticity of DEMAND Of GARMENT INDUSTRIES IN INDIA Vaibhav yadav 11llb064 section -B
INDEX What is demand What is supply What is equilibrium Exception of demand and supply Income Elasticity of demand Garment industries in India
DemandDEMANDQuantity of goods and services that people are ready to buy at various priceswithin same period of time.LAW OF DEMANDWhenever the price decreasedemand increases.NON PRICE DETERMINENTOF DEMANDTaste and preferences, Income,No. of buyers, Future expectation,Price of related goodGarment Industries follow the lawof demandand demand increases on seasonal Demand curveclothes.
SUPPLYSUPPLYQuantity of goods and services that people are ready to sell at variousprices within same period of timeLaw of supplywhenever the price decreases supplyincreases.NON PRICE DETERMINENT OF SUPPLYCost and technology, income ofcustomer, rise of substitute goods orprice of complimentary goods, futureexpectations, no. of sellers, whetherconditionsGarment supply increases at thestarting new season . Supply curve
EQUILIBRIUMThe price that equate the quantitydemanded within the quantitysuppliedORIt also defines as the price whichclear the condition of either surplusor shortage.IN EQUILIBRIUM the garmentindustry is in a state in whichsupply and demand is on constantlevel. Equilibrium curve
Exception to the law of demand and supply Giffen goods Veblen goods Giffen good is one which Veblen goods are a group people paradoxically consume of commodities for which more of as the price rises, peoples preference for buying violating the law of demand. In them increases as their price normal situations, as increases, as greater price the price of a good rises, confers greater status, instead the substitution effect causes of decreasing according to consumers to purchase less of the law of demand. A Veblen it and more of substitute good is often also a positional goods. In the Giffen good good. situation the income effect dominates, leading people to buy more of the good, even as its price rises.
Income elasticity of demand Income elasticity of demand measures the relationship between a change in quantity demanded for good X and a change in real income. The formula for calculating income elasticity: % change in demand divided by the % change in income Garment industry follow the income elasticity of demand –people prefer to buy garments according to their income.
Normal and inferior goodsACCORDIND TO THE CONCEPT OF DEMANDAND INCOME -THE GOODS ARE DIVIDEDINTO NORMAL GOODS INFERIOR GOODS Demand increase with Demand decrease with increase in income decrease in income Generally garments fall in the category of normal goods
Some of the leading Garment industries of India Flying machine Cantabil Numer Uno Marks and Spencer KOUTONS LEVIS STRATUS All these garment industries follow the law of demand and supply and follow the income elasticity of demand. Garment industries generally use the concept of SALE to increase the sales of the garments.