This document defines key economic concepts related to demand and supply. It explains that demand is the quantity of a good or service consumers are willing and able to purchase at a given price. The demand curve slopes downward to show the inverse relationship between price and quantity demanded. Supply is defined as the quantity of a good or service producers are willing to sell at a given price. The supply curve slopes upward to show the direct relationship between price and quantity supplied. Equilibrium occurs where quantity demanded equals quantity supplied. Changes in factors like income, prices of related goods, and technology can cause the demand and supply curves to shift, leading to a new equilibrium price and quantity.

2. Quantity of goods & services that
is purchased by the consumers
or,the consumers are ready to
buy at a certain price,that is
called Demand.

3. Demand function ;
Qd = f(p) .
Because of the inverse relationship between
price & quantity demanded,demand curve
slopes downward to right.

4. All other things remaining unchanged,a rise in
price leads to a fall in quantity demanded
and,fall in price leads to a rise in quantity
demanded.This inverse relationshiip between
price & quantity demanded is known as the
Law of Demand.
 The demand equation ;
Qd= a-bp

5. Demand of goods & services depends upon
various factors.These factors are known as
the Determinents of Demand.Three major
determinents of demand is:
Own Price.
Price of other goods.
Income.
They are discussed here;

6. All other things remaining unchanged,a fall in own price of a good or service
leads to the rise in it’s own quantity of demand.This inverse relationship
between price & quantity of demanded of a good gives rise to negative
sloping demand curve.

7. Price of complimentary goods or services raises the cost o using the other
demanded goods or services.For example;Let ‘X’ & ‘Y’ are
complimentary goods.When,the price of ‘Y’ good increases then,the
consumption of ‘X’ good will be decreased or,vice versa.

8. Increase in income may cause an increase or decrease in demand for goods
or services.But,it depends upon the nature of goods.In case of normal
goods,an increase in income causes the increase in demand.On the other
hand,in case of inferior goods,an increase in income causes the decrease
in demand.

9. o Demand curve moves when,price of
goods or services increase or decreases.
o Demand curve shifts when,income or
taste increase or decreases.

10. Demand of goods & services that is created by single individual,is called
Individual demand.
&
The total amount of all individual demand at a certain price is known as
Market demand.

11. Amount of goods & services that is sold by
consumers or,consumers are ready to sell
that goods or services at a certain price,is
called Supply.
Equation of Supply is;
Qs = -c+dp

12. Supply function ;
Qs=f(p)

13. Among other factors,price of goods,price of
factors of production,technology,weather
largely influences Supply.

14. Rightward shifting in supply curve may be
occurred due to the technological
improvements favourable weather
etc.Same as supply curve may be gone
leftward due to increase in factors of
price,technological weakens
or,unfavourable weather.

15. Equility between quantity demanded & quantity supply is known as
Equilibrium.If quantity demanded exceeds quantity supply then,excess
demand will prevail that pushes price up.Excess supply measured as the
quantity of supply over demand,in contrast drives price down.

16. Equilibrium condition;
QD=QS
Here;
QD = a-bp
QS= -c+dp
Appendix:
With the equilibrium condition,given above,find the market
equilibrium’s value of P & Q.

17. Factors influencing demand & supply will cause
a corresponding change in equilibrium.They
are;
 Change in equilibrium through change in income.
 Change in equilibrium for unfavourable rainfall.
 Change in equilibrium via equal change in demand
& supply.
 Change in equilibrium via larger change in demand.
 Change in equilibrium via larger change in supply.