This document defines demand and discusses the key concepts related to demand including: - Demand schedules, demand curves, and demand functions which show the relationship between price and quantity demanded. - The law of demand which states that, all other factors remaining constant, price and quantity demanded move in opposite directions. - Exceptions to the law of demand such as Giffen goods and necessities. - Factors that influence demand such as income, price of substitutes and complements, tastes and preferences, and government policies. - The downward slope of the demand curve which is due to the concepts of diminishing marginal utility, income and substitution effects. - Classifications of demand such as

1. DEMAND
PRESENTED BY:-
ANKUR KUMAR
MCOM-1

5. DEMANDDEFINITATION
 DEMAND IS AN EFFECTIVE DESIRE BACKED BY :-
1. ABILITY TO PAY
2. WILLINGNESS TO BUY
3. AT A GIVEN PRICE
4. GIVEN TIME FOR A COMMODITY

6. DEMAND SCHEDULE:-
 THE TABULAR STATEMENT SHOWING THE
PRICE - DEMAND RELATIONSHIP IS
KNOWN AS DEMAND SCHEDULE.
 THERE ARE 2 TYPES OF DEMAND SCHEDULES:-
1. INDIVIUAL DEMAND SCHEDULE:-
DEMAND BY A HOUSEHOLD FOR A COMMODITY AT
DIFFERENT PRICES.
2. MARKET DEMAND SCHEDULE:-
DEMAND OF THE WHOLE MARKET FOR A COMMODITY
AT DIFFERENT PRICES.

8. DEMAND CURVE
 WHEN A DEMAND SCHEDULE IS DEPICTED BY
THE GRAPH , IT BECOMES DEMAND CURVE.
 THERE ARE 2TYPES OF DEMAND CURVES:-
1. INDIVIDUAL DEMAND CURVE
2. MARKET DEMAND CURVE

9. DEMAND FUNCTION:-
FUNCTIONAL RELATIONSHIP B/W THE
DEMAND FOR A COMMODITY AND ITS
AFFECTING FACTORS.
Dx=F(Px,Pr,Y,T...)
HERE; Dx=DEMAND FOR X COMMODITY
Pr=PRICE OF RELATED GOODS
Y=INCOME OF CONSUMER
T= TASTE ANDPREFERENCES

10. LAW OF DEMAND
 OTHER THINGS BEING EQUAL /CONSTANT.WHEN
THE DEMAND OF A COMMODITY EXPANDS WITH
THE FALLS IN ITS PRICE AND CONTRACTS WITH THE
RISE IN ITS PRICE IS KNOWN AS LAW OF DEMAND.
 Dx=f(Px,Pr,Y,T…)
 HERE;
 Dx= DEMAND FOR X COMMODITY
 Px= PRICE OF X COMMODITY
 Pr=CONSTANT PRICE OF RELATED GOODS
 Y=CONSTANT CONSUMER`S INCOME
 T=CONSTANT TASTE AND PREFERENCE

11. TABLE:-
Px(RS.) Dx(units)
1 30
2
3
20
10

13. ASSUMPTIONS OF LAW OF DEMAND:-
1. THERE IS NO CHANGE IN CONSUMER`S
INCOME.
2. NO CHANGE IN TASTE AND PREFERENCES.
3. NO CHANGE IN PRICE OF RELATED GOODS.
4. NO CHANGE IN POPULATION.

14. EXTENSION OF DEMAND:-
OTHER THINGS BEING EQUAL /CONSTANT
,WHEN MORE QTY. IS DEMANDED BECAUSE
OF FALL IN ITS PRICE , IT IS CALLED
EXTENSION OF DEMAND.
Px(Rs.) Dx(units)
10
8
20
25

15. CONTRACTION OF DEMAND:-
OTHER THINGS BEINGS EQUAL /CONSTANT
WHEN LESS QTY. IS DEMANDED BECAUSE OF
RISE IN ITS PRICE , IT IS TERMED AS
CONTRACTION OF DEMAND.
Px(Rs.) Dx(units)
10
12
20
15

16. INCREASE IN DEMAND:-
 WHEN BECAUSE OF CHANGE IN FACTORS
OTHERS THAN PRICE OF THE COMMODITY
CONCERNED, MORE QTY. AT THE SAME PRICE
OR SAME QTY. AT HIGHER PRICE IS DEMANDED
IS CALLED INCREASE OF DEMAND.
Px(Rs.) Dx(units)
10
10
20
25
Px(Rs.) Dx(units)

17. DECREASE IN DEMAND:-
 WHEN BECAUSE CHANGE OF THE FACTORS
OTHER THAN THE PRICE OF THE COMMODITY
CONCERNED , LESS QTY. AT THE SAME PRICE OR
SAME QTY. AT A LOWER PRICE IS DEMANDED IS
KNOWN AS DECREASE IN DEMAND.
Px(Rs.) Dx(units)
10
10
20
15
Px(Rs.) Dx(units)

18. MOVEMENT ALONG DEMAND CURVE:-
 OTHER THINGS BEING EQUAL,IF THE QTY .
DEMANDED INCREASE OR DECREASES DUE TO
FALL OR RISE IN PRICE OF THE COMMODITY
ABOVE KNOWN AS MOVEMENT ALONG
DEMAND CURVE.
 THERE IS UPWARD OR DOWNWARD MOVEMENT
ALONG THE SAME DEMAND CURVE.
IT IS DUE TO CHANGE IN PRICE ONLY.
CHANGE IN QTY.

19. FIG:-

20. SHIFTING OF DEMAND CURVE:-
 IF MORE OR LESS QTY . OF A COMMODITY IS
DEMANDED , AT THE SAME PRICE DUE TO
CHANGE IN FACTORS OTHER THAN THE PRICE OF
THE COMMODITY CONCERNED ,IT IS CALLED AS
SHIFTING OF DEMAND CURVE.
THERE IS A RIGHTWARD OR LEFTWARD SHIFT IN
DEMAND CURVE.
IT IS DUE TO CHANGE IN INCOME, TASTE ,
FASHION, GOVT. POLICY, ETC.
CHANGE IN DEMAND.

21. FIG.:-

22. EXCEPTIONS OF LAW OF DEMAND:-
EXPECTATION OF FURTHER CHANGE IN PRICE OF
THE COMMODITY.
PRESTIGIOUS GOODS
GIFFEN GOODS
NECESSITIES
DEMONSTRATION EFFECT
EMERGENCY

23. REASONS FOR DEMAND CURVE
SLOPES DOWNWARD TO RIGHT:-
1. LAW OF DIMINISHING MARGINAL UTILITY
2. INCOME EFFECTS
3. SUBSTITUTION EFFECTS
4. NEW CUSTOMERS
5. DIFFERENT USES

24. FACTORS AFFECTING DEMAND:-
A. INDIVIDUAL DEMAND:-
1. CHANGE IN CONSUMER`S INCOME:- INCOME
DEMAND -2 GOODS
i. NORMAL GOODS
ii. INFERIOR GOODS
2 PRICE OF THE COMMODITY
3 CHANGE IN PRICE OF RELATED GOODS:-
i. SUBSTITUTE GOODS
ii. COMPLEMENTARY GOODS
4 CHANGE IN TASTE, NATURE, AND FASHION
5 EXCEPTATION OF FURTHER PRICE CHANGE
6 CHANGE IN CLIMATE AND SEASONS

25. FACTORS AFFECTING DEMAND:-
B. MARKET DEMAND:-
1. POPULATION AND NO. OF HOUSEHOLD
2. DISTRIBUTION OF INCOME AND WEALTH
3. GOVT. POLICY

26. CLASSIFICATION OF DEMAND:-
1. DERIVED AND AUTONOMOUS DEMAND
2. INDUSTRIES AND COMPANIES DEMAND
3. TOTAL MARKET AND MARKET SEGMENT
DEMAND
4. INDIVIDUAL AND MARKET DEMAND
5. LONG TERM AND SHORT TERM DEMAND
6. PRODUCERS GOODS AND CONSUMER GOODS
DEMAND