The document discusses demand theory, subsidies, and India's energy sector. It explains demand theory, including the demand curve and factors that influence demand elasticity. It then discusses the concept of subsidies, their types and rationale, as well as their advantages and disadvantages. Specifically regarding India, it outlines the trends in central government subsidies from 1994-1995 and classifications of subsidies. It also discusses explicit central government subsidies like food and fertilizer subsidies.
This document discusses demand theory and related concepts. It begins by defining demand as a buyer's willingness and ability to pay for a quantity of goods or services. It then covers the theory of demand, including its development by economists like Walras, Marshall, and Arrow. The document discusses the concept of effective demand and different types of demand like direct, derived, competitive, complementary, composite, and perishable versus durable. It also covers determinants of demand like price, income, tastes, expectations, and advertising. The law of demand and demand schedules and curves are explained. Exceptions to the law of demand like Giffen and Veblen goods are also mentioned.
As the population and number of consumers increases, the overall demand for goods will also rise. Demand depends on factors like income, tastes, product preferences, prices of substitutes and complements, and special occasions. When income or the price of complements decrease, demand is likely to increase. However, if the price of substitutes decreases or income declines, demand may fall instead. Advertising can also impact tastes and demand over time.
Best PPT on Chapter Demand from economics for Students.DhruvArora87
The document discusses the concept of demand, including:
- Demand is the quantity of a commodity a consumer is willing and able to buy at a given price over a period of time.
- Individual demand depends on price of the good, income, tastes/preferences, and related goods' prices. Market demand also depends on population size/composition, season/weather, and income distribution.
- Demand functions and schedules show the relationship between quantity demanded and influencing factors. The law of demand states an inverse relationship between price and quantity demanded when other factors remain constant. Exceptions to the law include Giffen goods and necessities.
1) Demand refers to an effective desire for a commodity, backed by the ability and willingness to pay for it. Demand depends on factors like price, income, tastes, expectations about future prices, and advertising.
2) Individual demand refers to what one consumer will buy, while market demand is the total demand from all consumers. Market demand determines sales and prices.
3) Factors that influence demand include price, income, tastes, prices of substitutes and complements, expectations, advertising, number of consumers, and economic conditions.
This chapter discusses supply and demand and how equilibrium price and quantity are determined in markets. It introduces the concepts of supply and demand curves and how they interact. When supply and demand are equal, the market reaches equilibrium. The chapter explains how shifts in supply or demand curves affect equilibrium price and quantity. It also discusses the efficiency principle and how equilibrium achieves the most efficient allocation of resources, as long as markets are perfectly competitive and there are no externalities.
- A market is where buyers and sellers interact to determine price and quantity for goods and services. The demand side refers to consumers and how much they are willing to pay.
- Firms produce goods and services and households consume them. The circular flow shows the relationship between firms and households in input and output markets.
- Demand is affected by price, income, wealth, tastes, expectations and prices of related goods. The law of demand states that as price increases, quantity demanded decreases.
Demand Supply analysis...Explanations for Law of Demand Degree of scarcity of one good relative to another helps determine each good’s relative price Definition of demand includes the “other things constant” assumption Among the “other things” are the prices of other goods Substitution Effect When the price of a good falls, its relative price makes consumers more willing to purchase this good When the price of a good increases, its relative price makes consumers less willing to purchase this good Changes in the relative prices – the price of one good compared to the prices of other goods – causes the substitution effect…you substitute toward the less expensive good.
Demand refers to the quantity of a good or service that consumers are willing and able to purchase at various prices. Individual demand is the amount an individual consumer will purchase, while market demand is the total quantity demanded by all consumers in the market. Demand is determined by factors like price, income, tastes, and availability of substitutes. According to the law of demand, demand is inversely related to price - demand decreases as price increases. Changes in demand occur due to non-price factors, while changes in quantity demanded occur due to price changes. Elasticity measures the responsiveness of demand to various determinants like price, income, and prices of related goods. Demand forecasting is used for production, pricing, and other
This document discusses demand theory and related concepts. It begins by defining demand as a buyer's willingness and ability to pay for a quantity of goods or services. It then covers the theory of demand, including its development by economists like Walras, Marshall, and Arrow. The document discusses the concept of effective demand and different types of demand like direct, derived, competitive, complementary, composite, and perishable versus durable. It also covers determinants of demand like price, income, tastes, expectations, and advertising. The law of demand and demand schedules and curves are explained. Exceptions to the law of demand like Giffen and Veblen goods are also mentioned.
As the population and number of consumers increases, the overall demand for goods will also rise. Demand depends on factors like income, tastes, product preferences, prices of substitutes and complements, and special occasions. When income or the price of complements decrease, demand is likely to increase. However, if the price of substitutes decreases or income declines, demand may fall instead. Advertising can also impact tastes and demand over time.
Best PPT on Chapter Demand from economics for Students.DhruvArora87
The document discusses the concept of demand, including:
- Demand is the quantity of a commodity a consumer is willing and able to buy at a given price over a period of time.
- Individual demand depends on price of the good, income, tastes/preferences, and related goods' prices. Market demand also depends on population size/composition, season/weather, and income distribution.
- Demand functions and schedules show the relationship between quantity demanded and influencing factors. The law of demand states an inverse relationship between price and quantity demanded when other factors remain constant. Exceptions to the law include Giffen goods and necessities.
1) Demand refers to an effective desire for a commodity, backed by the ability and willingness to pay for it. Demand depends on factors like price, income, tastes, expectations about future prices, and advertising.
2) Individual demand refers to what one consumer will buy, while market demand is the total demand from all consumers. Market demand determines sales and prices.
3) Factors that influence demand include price, income, tastes, prices of substitutes and complements, expectations, advertising, number of consumers, and economic conditions.
This chapter discusses supply and demand and how equilibrium price and quantity are determined in markets. It introduces the concepts of supply and demand curves and how they interact. When supply and demand are equal, the market reaches equilibrium. The chapter explains how shifts in supply or demand curves affect equilibrium price and quantity. It also discusses the efficiency principle and how equilibrium achieves the most efficient allocation of resources, as long as markets are perfectly competitive and there are no externalities.
- A market is where buyers and sellers interact to determine price and quantity for goods and services. The demand side refers to consumers and how much they are willing to pay.
- Firms produce goods and services and households consume them. The circular flow shows the relationship between firms and households in input and output markets.
- Demand is affected by price, income, wealth, tastes, expectations and prices of related goods. The law of demand states that as price increases, quantity demanded decreases.
Demand Supply analysis...Explanations for Law of Demand Degree of scarcity of one good relative to another helps determine each good’s relative price Definition of demand includes the “other things constant” assumption Among the “other things” are the prices of other goods Substitution Effect When the price of a good falls, its relative price makes consumers more willing to purchase this good When the price of a good increases, its relative price makes consumers less willing to purchase this good Changes in the relative prices – the price of one good compared to the prices of other goods – causes the substitution effect…you substitute toward the less expensive good.
Demand refers to the quantity of a good or service that consumers are willing and able to purchase at various prices. Individual demand is the amount an individual consumer will purchase, while market demand is the total quantity demanded by all consumers in the market. Demand is determined by factors like price, income, tastes, and availability of substitutes. According to the law of demand, demand is inversely related to price - demand decreases as price increases. Changes in demand occur due to non-price factors, while changes in quantity demanded occur due to price changes. Elasticity measures the responsiveness of demand to various determinants like price, income, and prices of related goods. Demand forecasting is used for production, pricing, and other
Demand refers to the quantity of a good or service consumers are willing and able to purchase at various prices. Demand is affected by the good's own price, prices of complements and substitutes, consumer income and tastes, and consumer expectations. The demand schedule shows the relationship between price and quantity demanded, with quantity demanded decreasing as price increases according to the law of demand. Individual demand schedules combine to form the market demand schedule. A demand curve graphs this relationship, sloping downward from left to right. Shifts in the curve represent changes in demand caused by changes in its determinants.
This document provides an overview of supply and demand concepts including:
- Demand curves slope downward as price increases, reflecting that consumers will buy less at higher prices. Supply curves slope upward as costs of production determine how much sellers offer.
- Market equilibrium occurs where supply and demand are equal, with no tendency for prices or quantities to change further.
- Shifts in supply or demand curves cause changes in market equilibrium price and quantity according to four rules about how prices and quantities adjust with shifts.
- The efficiency principle holds that equilibrium prices maximize total surplus when markets account for all social costs and benefits. Externalities can cause markets to be inefficient.
1) The document discusses the theory of demand and supply. It defines demand as the quantities of a good that consumers are willing and able to purchase at various prices. Supply is defined as the quantities of a good that producers are willing to offer for sale at various prices.
2) The law of demand states that, other things remaining constant, as price increases, quantity demanded decreases. The law of supply states that as price increases, quantity supplied also increases.
3) Market equilibrium occurs where quantity demanded equals quantity supplied. This establishes an equilibrium price where markets clear without surplus or shortage.
This document discusses factors that affect demand, including price, income, prices of other goods, number of buyers, future prices, tastes, and quality. Price is the most important determinant of demand, as a change in price causes a shift along the demand curve. Changes in other factors like income, population, or tastes can cause the entire demand curve to shift. An increase in demand shifts the curve to the right, raising price and quantity demanded, while a decrease shifts it left, lowering price and quantity.
This document discusses the economic concept of demand. It defines demand as the quantity of a good or service that consumers are willing and able to purchase at various price levels. Demand is determined by factors like price, income, tastes, population, and prices of substitutes. The law of demand states that, all else equal, demand increases when price decreases and decreases when price increases. Demand can change due to shifts in the demand curve from changes in these determinants, other than price.
This document provides an overview of market demand theory including definitions of demand, the demand curve, factors that shift the demand curve, and the concepts of utility and diminishing marginal utility. It defines demand as the quantity consumers are willing and able to purchase at a given price. The demand curve illustrates the inverse relationship between price and quantity demanded. Factors like income levels, prices of substitutes/complements, and advertising can cause the demand curve to shift. Utility represents satisfaction from consumption, and the idea of diminishing marginal utility explains why demand curves slope downward.
This document discusses the economic concepts of supply, demand, and market equilibrium. It provides details on:
1) How supply and demand curves model the relationship between price, quantity supplied, and quantity demanded in a competitive market, resulting in an equilibrium price and quantity.
2) The key determinants that influence supply and demand curves, including price, income, tastes, population, and prices of substitutes and complements.
3) How shifts in supply or demand curves due to changes in these determinants impact the market equilibrium price and quantity.
This document discusses demand analysis and supply analysis. It defines demand as a relationship between price and quantity demanded, outlines the three things essential for desire to become effective demand, and describes the three alternative ways to express demand: demand function, demand schedule, and demand curve. It then discusses factors that affect demand, types of demand, and exceptions to the law of demand. The document also defines supply, outlines the law of supply, and explains how supply curves depict the relationship between price and quantity supplied. It concludes by interpreting how changes in demand and supply can shift the equilibrium price and quantity in a market.
This document discusses demand analysis and the factors that influence demand. It covers the key concepts of demand, including the law of demand which states that quantity demanded is inversely related to price when all other factors are held constant. The document explains the factors that cause the demand curve to slope downward, such as substitution effects and income effects. It also discusses exceptions to the law of demand and other factors that influence demand, such as income, price of related goods, tastes and preferences.
This document discusses the theory of demand, including the definition of demand, factors that affect demand, and the law of demand. Demand is defined as the amount of a good that a consumer is willing and able to purchase at a given price within a certain period of time. Factors that influence demand include a good's utility, consumer income levels, wealth distribution, prices of the good and related goods, tastes and preferences, and expected future price changes. The law of demand states that, all else remaining equal, demand for a good increases when its price decreases and decreases when its price increases, resulting in an inverse relationship between price and quantity demanded.
This document discusses demand, supply, and market equilibrium. It begins by defining demand as the quantity of a product consumers are willing and able to purchase at various prices. The law of demand states that, all else equal, quantity demanded increases as price decreases. Supply is defined as the quantity producers are willing to provide at various prices. The law of supply indicates that, all else equal, quantity supplied increases as price increases. Equilibrium occurs where supply and demand are equal, at the price where quantity supplied equals quantity demanded. The document outlines factors that shift supply and demand curves, such as income, prices of related goods, and technology. It also discusses how markets can experience surpluses or shortages and how prices act to ration
This document discusses different economic systems for allocating resources and how demand and supply determine price. There are three basic ways to allocate resources: market economy, mixed economy, and planned economy. A market economy relies on supply and demand with no government intervention to determine what and how much is produced. A mixed economy has both private and public sectors with some government intervention. A planned economy has all production controlled by the government. Demand and supply curves show the relationship between price and quantity. When demand and supply are equal, the equilibrium price is reached. The equilibrium can change due to shifts in demand or supply curves.
The document discusses factors that can affect demand beyond just price. These factors include consumer income, expectations, population change, and tastes/trends. Changes in these non-price factors do not cause movement along the demand curve, but instead shift the entire demand curve, either to the right if demand increases or to the left if demand decreases. Examples are given for how each factor can impact demand for certain goods.
This is a small and easy description of demand and its determinants. PLEASE MUST WATCH IT AND UNDERSTAND IT AND ASK YOUR QUARRIES ALSO , i would love to solve it and give your peaceful reviews regarding this presentation weather it is bad or good.
THANK YOU!!
The document discusses the law of demand, which states that as the price of a product increases, quantity demanded decreases, and vice versa. It defines the law of demand and explains that it shows the inverse relationship between price and quantity on a demand curve graph. The demand curve is downward sloping, with price on the vertical axis and quantity on the horizontal axis, and it holds all other factors that influence demand constant.
This document defines demand and discusses the different types of demand. It explains that demand is expressed in relation to price and time period. The key types of demand discussed are individual demand, market demand, ex-ante and ex-post demand, and joint demand. Determinants of demand include price, income, tastes/preferences, prices of related goods, expectations, credit availability, population, income distribution, and government policy. The law of demand and exceptions to it are explained. Movement along and shifts of the demand curve are also summarized.
The document discusses concepts related to demand, including the law of demand, demand schedules, demand curves, elasticity of demand, and how elasticity affects total revenue. Specifically, it explains that according to the law of demand, as price increases, quantity demanded decreases, and vice versa. It provides examples of demand schedules and how they are used to construct demand curves. It also discusses factors that can cause a shift in the demand curve, such as changes in income, population, or prices of related goods. Finally, it explains the concept of elasticity of demand and how elastic versus inelastic demand impacts a firm's total revenue when price is changed.
Demand is defined as the quantity of a commodity that consumers are willing and able to purchase at a given price in a given time period. Demand can be categorized based on the nature of the commodity, time period, and relationship to other goods. Law of demand states that, all else equal, demand is inversely related to price - as price increases, demand decreases, and vice versa. Factors that influence demand include price, tastes, income, prices of substitutes and complements, and expectations about future prices and income. Elasticity refers to the responsiveness of demand or supply to price changes. Income elasticity measures the responsiveness of demand to changes in income. Cross-price elasticity measures the responsiveness of demand
Changes in factors like consumer income, price of the product, expectations, related goods' prices, population, and tastes can shift the demand curve for a good. An increase in these factors shifts the curve to the right by increasing demand at all prices, while a decrease shifts the curve left by reducing demand. Income increases normally boost demand for normal goods but reduce it for inferior goods. Expectations of future price changes also impact current demand.
This document provides an overview of health care production and markets. It begins by outlining the key concepts to be covered, including demand and supply, elasticity, equilibrium, and market failure. It then defines some important economic terms like ceteris paribus. The document goes on to explain demand, including the law of demand and determinants of demand. It also covers supply, the law of supply, and factors that can shift the supply curve. Finally, it discusses market equilibrium and sources of market failure in health care markets.
This chapter introduces the concepts of supply and demand. It discusses how markets work through the interaction of supply and demand. The chapter defines different market types and outlines the factors that determine demand and supply in competitive markets. It establishes how changes in demand or supply affect price and quantity sold in a market. The chapter also looks at how prices allocate scarce resources in society.
Demand refers to the quantity of a good or service consumers are willing and able to purchase at various prices. Demand is affected by the good's own price, prices of complements and substitutes, consumer income and tastes, and consumer expectations. The demand schedule shows the relationship between price and quantity demanded, with quantity demanded decreasing as price increases according to the law of demand. Individual demand schedules combine to form the market demand schedule. A demand curve graphs this relationship, sloping downward from left to right. Shifts in the curve represent changes in demand caused by changes in its determinants.
This document provides an overview of supply and demand concepts including:
- Demand curves slope downward as price increases, reflecting that consumers will buy less at higher prices. Supply curves slope upward as costs of production determine how much sellers offer.
- Market equilibrium occurs where supply and demand are equal, with no tendency for prices or quantities to change further.
- Shifts in supply or demand curves cause changes in market equilibrium price and quantity according to four rules about how prices and quantities adjust with shifts.
- The efficiency principle holds that equilibrium prices maximize total surplus when markets account for all social costs and benefits. Externalities can cause markets to be inefficient.
1) The document discusses the theory of demand and supply. It defines demand as the quantities of a good that consumers are willing and able to purchase at various prices. Supply is defined as the quantities of a good that producers are willing to offer for sale at various prices.
2) The law of demand states that, other things remaining constant, as price increases, quantity demanded decreases. The law of supply states that as price increases, quantity supplied also increases.
3) Market equilibrium occurs where quantity demanded equals quantity supplied. This establishes an equilibrium price where markets clear without surplus or shortage.
This document discusses factors that affect demand, including price, income, prices of other goods, number of buyers, future prices, tastes, and quality. Price is the most important determinant of demand, as a change in price causes a shift along the demand curve. Changes in other factors like income, population, or tastes can cause the entire demand curve to shift. An increase in demand shifts the curve to the right, raising price and quantity demanded, while a decrease shifts it left, lowering price and quantity.
This document discusses the economic concept of demand. It defines demand as the quantity of a good or service that consumers are willing and able to purchase at various price levels. Demand is determined by factors like price, income, tastes, population, and prices of substitutes. The law of demand states that, all else equal, demand increases when price decreases and decreases when price increases. Demand can change due to shifts in the demand curve from changes in these determinants, other than price.
This document provides an overview of market demand theory including definitions of demand, the demand curve, factors that shift the demand curve, and the concepts of utility and diminishing marginal utility. It defines demand as the quantity consumers are willing and able to purchase at a given price. The demand curve illustrates the inverse relationship between price and quantity demanded. Factors like income levels, prices of substitutes/complements, and advertising can cause the demand curve to shift. Utility represents satisfaction from consumption, and the idea of diminishing marginal utility explains why demand curves slope downward.
This document discusses the economic concepts of supply, demand, and market equilibrium. It provides details on:
1) How supply and demand curves model the relationship between price, quantity supplied, and quantity demanded in a competitive market, resulting in an equilibrium price and quantity.
2) The key determinants that influence supply and demand curves, including price, income, tastes, population, and prices of substitutes and complements.
3) How shifts in supply or demand curves due to changes in these determinants impact the market equilibrium price and quantity.
This document discusses demand analysis and supply analysis. It defines demand as a relationship between price and quantity demanded, outlines the three things essential for desire to become effective demand, and describes the three alternative ways to express demand: demand function, demand schedule, and demand curve. It then discusses factors that affect demand, types of demand, and exceptions to the law of demand. The document also defines supply, outlines the law of supply, and explains how supply curves depict the relationship between price and quantity supplied. It concludes by interpreting how changes in demand and supply can shift the equilibrium price and quantity in a market.
This document discusses demand analysis and the factors that influence demand. It covers the key concepts of demand, including the law of demand which states that quantity demanded is inversely related to price when all other factors are held constant. The document explains the factors that cause the demand curve to slope downward, such as substitution effects and income effects. It also discusses exceptions to the law of demand and other factors that influence demand, such as income, price of related goods, tastes and preferences.
This document discusses the theory of demand, including the definition of demand, factors that affect demand, and the law of demand. Demand is defined as the amount of a good that a consumer is willing and able to purchase at a given price within a certain period of time. Factors that influence demand include a good's utility, consumer income levels, wealth distribution, prices of the good and related goods, tastes and preferences, and expected future price changes. The law of demand states that, all else remaining equal, demand for a good increases when its price decreases and decreases when its price increases, resulting in an inverse relationship between price and quantity demanded.
This document discusses demand, supply, and market equilibrium. It begins by defining demand as the quantity of a product consumers are willing and able to purchase at various prices. The law of demand states that, all else equal, quantity demanded increases as price decreases. Supply is defined as the quantity producers are willing to provide at various prices. The law of supply indicates that, all else equal, quantity supplied increases as price increases. Equilibrium occurs where supply and demand are equal, at the price where quantity supplied equals quantity demanded. The document outlines factors that shift supply and demand curves, such as income, prices of related goods, and technology. It also discusses how markets can experience surpluses or shortages and how prices act to ration
This document discusses different economic systems for allocating resources and how demand and supply determine price. There are three basic ways to allocate resources: market economy, mixed economy, and planned economy. A market economy relies on supply and demand with no government intervention to determine what and how much is produced. A mixed economy has both private and public sectors with some government intervention. A planned economy has all production controlled by the government. Demand and supply curves show the relationship between price and quantity. When demand and supply are equal, the equilibrium price is reached. The equilibrium can change due to shifts in demand or supply curves.
The document discusses factors that can affect demand beyond just price. These factors include consumer income, expectations, population change, and tastes/trends. Changes in these non-price factors do not cause movement along the demand curve, but instead shift the entire demand curve, either to the right if demand increases or to the left if demand decreases. Examples are given for how each factor can impact demand for certain goods.
This is a small and easy description of demand and its determinants. PLEASE MUST WATCH IT AND UNDERSTAND IT AND ASK YOUR QUARRIES ALSO , i would love to solve it and give your peaceful reviews regarding this presentation weather it is bad or good.
THANK YOU!!
The document discusses the law of demand, which states that as the price of a product increases, quantity demanded decreases, and vice versa. It defines the law of demand and explains that it shows the inverse relationship between price and quantity on a demand curve graph. The demand curve is downward sloping, with price on the vertical axis and quantity on the horizontal axis, and it holds all other factors that influence demand constant.
This document defines demand and discusses the different types of demand. It explains that demand is expressed in relation to price and time period. The key types of demand discussed are individual demand, market demand, ex-ante and ex-post demand, and joint demand. Determinants of demand include price, income, tastes/preferences, prices of related goods, expectations, credit availability, population, income distribution, and government policy. The law of demand and exceptions to it are explained. Movement along and shifts of the demand curve are also summarized.
The document discusses concepts related to demand, including the law of demand, demand schedules, demand curves, elasticity of demand, and how elasticity affects total revenue. Specifically, it explains that according to the law of demand, as price increases, quantity demanded decreases, and vice versa. It provides examples of demand schedules and how they are used to construct demand curves. It also discusses factors that can cause a shift in the demand curve, such as changes in income, population, or prices of related goods. Finally, it explains the concept of elasticity of demand and how elastic versus inelastic demand impacts a firm's total revenue when price is changed.
Demand is defined as the quantity of a commodity that consumers are willing and able to purchase at a given price in a given time period. Demand can be categorized based on the nature of the commodity, time period, and relationship to other goods. Law of demand states that, all else equal, demand is inversely related to price - as price increases, demand decreases, and vice versa. Factors that influence demand include price, tastes, income, prices of substitutes and complements, and expectations about future prices and income. Elasticity refers to the responsiveness of demand or supply to price changes. Income elasticity measures the responsiveness of demand to changes in income. Cross-price elasticity measures the responsiveness of demand
Changes in factors like consumer income, price of the product, expectations, related goods' prices, population, and tastes can shift the demand curve for a good. An increase in these factors shifts the curve to the right by increasing demand at all prices, while a decrease shifts the curve left by reducing demand. Income increases normally boost demand for normal goods but reduce it for inferior goods. Expectations of future price changes also impact current demand.
This document provides an overview of health care production and markets. It begins by outlining the key concepts to be covered, including demand and supply, elasticity, equilibrium, and market failure. It then defines some important economic terms like ceteris paribus. The document goes on to explain demand, including the law of demand and determinants of demand. It also covers supply, the law of supply, and factors that can shift the supply curve. Finally, it discusses market equilibrium and sources of market failure in health care markets.
This chapter introduces the concepts of supply and demand. It discusses how markets work through the interaction of supply and demand. The chapter defines different market types and outlines the factors that determine demand and supply in competitive markets. It establishes how changes in demand or supply affect price and quantity sold in a market. The chapter also looks at how prices allocate scarce resources in society.
This document provides an overview of supply and demand concepts. It discusses key topics like:
- The four types of markets and how supply and demand determine price and quantity in competitive markets.
- The determinants of demand and how changes in factors like income, prices of related goods, and tastes can shift the demand curve.
- The law of demand and how quantity demanded responds to price changes along the demand curve.
- The determinants of supply and how supply curves can shift from changes in input prices, technology, and expectations.
- How supply and demand interact in equilibrium to establish price and quantity, and what occurs in situations of excess supply or demand.
- How equilibrium changes in response to shifts in
This document provides an overview of supply and demand concepts. It begins by outlining the key topics that will be covered in the chapter, including market types, factors that determine demand and supply, and how equilibrium price and quantity are established. The chapter then defines demand, determinants of demand like income and tastes, and the difference between changes in quantity demanded versus demand. Similarly, it defines supply, determinants of supply, and the difference between changes in quantity supplied versus supply. The chapter concludes by bringing supply and demand together and explaining how equilibrium works and how it can change based on shifts in either curve.
3. Principles of economics- Market supply and demand.pptBlackMoon54
1) Supply and demand are the fundamental market forces that determine price and quantity in a competitive market.
2) Supply is determined by producers and increases with price, while demand is determined by consumers and decreases with price.
3) The equilibrium price is where supply and demand are equal in the market, resulting in neither a surplus or shortage.
Demand refers to effective demand backed by willingness and ability to purchase. The demand curve slopes downward to show an inverse relationship between price and quantity demanded. According to the law of demand, other things remaining constant, quantity demanded increases when price decreases as consumers will purchase more due to the income and substitution effects and the good attracting new consumers. Demand analysis is used for production planning, sales forecasting, inventory control, and economic policymaking.
This document discusses demand and supply analysis. It begins by defining demand as a want supported by both willingness and ability to pay. There are three conditions for a product to have demand: desire to buy it, willingness to pay the price, and ability to pay. Demand can be of different types depending on price, income, or related goods. The law of demand states that as price increases, quantity demanded decreases, assuming other factors remain unchanged. A demand curve on a graph shows the inverse relationship between price and quantity demanded. A change in a factor like income can cause a shift in the demand curve, representing a change in demand rather than a movement along the curve.
This document defines key concepts in microeconomics related to demand and supply, including elasticities. It explains the laws of demand and supply, and how non-price factors can cause shifts in demand and supply curves. It also defines different types of elasticities including price elasticity of demand, cross elasticity of demand, income elasticity of demand, and price elasticity of supply. Examples are provided to illustrate these concepts.
The document summarizes a lecture on principles of economics and business. It discusses key concepts including demand curves, shifts in demand, consumer surplus, supply curves, shifts in supply, producer surplus, market equilibrium, and how free markets maximize gains from trade. The lecture uses demand and supply analysis to explain price determination in markets and how prices adjust to clear markets and reach equilibrium when quantities supplied do not equal quantities demanded. It also distinguishes between shifts in demand/supply curves versus movements along existing curves.
This document introduces demand and supply. It defines demand as the willingness and ability to buy a good at a given price, while supply refers to the amount producers are willing to sell. Both demand and supply curves slope downward and upward respectively, showing that quantity demanded rises with lower prices and quantity supplied rises with higher prices. The curves can shift due to various factors like income, tastes, technology, and costs of related goods. The interaction of supply and demand determines market equilibrium price and quantity.
This document discusses microeconomic demand. It begins by defining demand and the law of demand, which states that quantity demanded varies inversely with price, assuming other factors remain constant. It then explains demand curves and how they illustrate the relationship between price and quantity demanded. It also discusses factors that influence demand elasticity, such as availability of substitutes, and how demand can change over time as consumers adjust to price changes.
This document discusses microeconomic demand. It begins by defining demand and the law of demand, which states that quantity demanded varies inversely with price, assuming other factors remain constant. It then explains demand schedules and demand curves, and how individual demand curves combine to form a market demand curve. The document also covers elasticity of demand, how it is calculated, and factors that influence elasticity such as availability of substitutes. Finally, it discusses how changes in factors like consumer income, prices of related goods, and consumer tastes can cause a shift in the demand curve.
1. The document discusses the fundamentals of demand and supply, including defining demand with a demand curve, the determinants of demand, and the difference between a shift in demand versus movement along a demand curve.
2. It explains that a demand curve slopes downward due to the law of demand and the law of diminishing marginal utility - as price increases, quantity demanded decreases.
3. The main determinants of demand are price of the good, income, tastes, prices of substitutes and complements, and expectations about future prices and income. A change in a determinant causes the demand curve to shift, while a change in price results in movement along the
This document discusses the economics of demand. It begins by defining demand and the law of demand, which states that quantity demanded varies inversely with price, assuming other factors remain constant. It then explains the concepts of the demand curve and demand schedule. Individual demand curves can be added together to form a market demand curve. The document also covers elasticity of demand, how it is calculated, and factors that influence elasticity like availability of substitutes. It provides examples of elasticity estimates for different products and concludes by discussing other determinants of demand like income, prices of related goods, and consumer tastes and expectations.
This document discusses the economics of demand. It begins by defining demand and the law of demand, which states that quantity demanded varies inversely with price, assuming other factors remain constant. It then explains the concepts of the demand curve and demand schedule. Individual demand curves can be added together to form a market demand curve. The document also covers elasticity of demand, how it is calculated, and factors that influence elasticity like availability of substitutes. It provides examples of elasticity estimates for different products and concludes by discussing other determinants of demand like income, prices of related goods, and consumer tastes and expectations.
This document discusses the economics of demand. It begins by defining demand and the law of demand, which states that quantity demanded varies inversely with price, all else equal. It then explains the concepts of the demand curve and demand schedule. Individual demand curves can be added together to form a market demand curve. The document also covers elasticity of demand, how it is calculated, and factors that influence elasticity like availability of substitutes. It provides examples of elasticity estimates for different products and concludes by discussing other determinants of demand like income, prices of related goods, and consumer tastes and expectations.
This document discusses how prices are determined by supply and demand and how they can change based on market factors. It explains the concept of market equilibrium and how shortages or surpluses cause prices to adjust back to equilibrium. An increase in supply shifts the supply curve right, lowering prices, while increased demand shifts the demand curve right, raising prices. Prices serve important roles as incentives for producers, signals for the market, and means for efficient allocation of resources. The government sometimes intervenes by imposing price floors or ceilings.
This document provides an overview of demand and supply analysis concepts including:
- Definitions of key terms like market, demand, individual vs market demand, determinants of demand, demand curves, law of demand, supply, determinants of supply, law of supply, and market equilibrium.
- Descriptions of different types of demand like organization vs industry demand, autonomous vs derived demand, short-term vs long-term demand.
- Explanations of concepts like demand schedules, demand functions, exceptions to the law of demand, law of diminishing marginal utility, and demand curves.
- Discussions of elasticity including definitions of price elasticity, income elasticity, cross elasticity, and promotional
This document provides an overview of demand, supply, and elasticity concepts. It defines key terms like market, demand, supply, equilibrium, price ceilings and floors. It explains the laws of demand and supply graphically and how shifts occur due to changes in determinants. It also defines different types of elasticity including price elasticity of demand and supply, income elasticity, and cross price elasticity. Formulas for computing elasticity coefficients are provided.
This document provides an introduction to CAD/CAM/CIM. It defines CAD as using computers to assist in the design process. CAM is defined as using computers to plan, manage and control manufacturing operations. CIM attempts complete automation of all manufacturing processes under computer control by integrating CAD, CAM and other business aspects. The document outlines several design disciplines and manufacturing processes. It discusses the need for CAD/CAM/CIM to increase productivity, improve quality and communication, create databases, optimize tool paths, and aid in production scheduling and shop floor control. The scope of CAD/CAM/CIM is also covered.
This document outlines the course contents for a course on energy economics. The course will cover 5 chapters on topics related to energy economics, including basic concepts, energy accounting frameworks, economic attributes of energy sources, applications of econometrics, and financial incentives for renewable energy. Students will learn about supply and demand of energy, how to tackle energy economics problems, and the role of engineering economy in decision making. The course aims to help students understand the fundamentals of energy economics and evaluate the financial and economic viability of renewable energy technologies.
This document discusses demand theory, the demand curve, elasticity of demand, and energy subsidies from both national and international perspectives. It explains that demand theory relates consumer demand for goods to their prices in the market. The demand curve shows the inverse relationship between quantity demanded and price. Elasticity of demand measures the responsiveness of quantity demanded to price changes. The document also outlines the objectives, advantages, and disadvantages of subsidies and their effects on markets.
The document discusses various renewable energy technologies and alternative fuels. It covers topics like technology cost trends, learning curves, characteristics of energy projects and electricity, dynamics of fuel substitution, and summaries various alternative fuels like ethanol, biodiesel, vegetable oils, methanol, hydrogen, natural gas, and their advantages and disadvantages. The key points are that renewable energy costs have decreased over time due to technological learning, but have stabilized or increased recently due to higher material costs and demand. It also summarizes different alternative fuels to gasoline and their potential to reduce emissions and reliance on conventional fuels.
This document summarizes key aspects of electricity generation and costs in the United States from the Annual Energy Outlook 2020 reference case. It finds that:
1) Natural gas and renewables increase as a share of electricity generation due to lower gas prices and declining costs of solar and wind capacity.
2) Electricity demand grows slowly at around 1% per year through 2050 due to economic growth offset by efficiency gains.
3) Natural gas combined cycle and solar PV are increasingly competitive technologies for new power plants based on their declining costs relative to revenues.
This document provides an overview of biorefineries. It defines a biorefinery as a refinery that converts biomass into energy and other beneficial byproducts. The document then discusses the uses of biorefineries, how they function, and the types of biorefineries including classification based on platforms, products, feedstocks, and processes used. It also describes the major biorefinery platforms of thermochemical/syngas and biochemical/sugar, and important feedstocks like sugar, starch, and lignocellulosic materials. Gasification and types of gasifiers and fermentation of lignocellulosic feedstock are also summarized.
The document discusses various processes for converting biomass into solid, liquid, and gaseous biofuels. It describes drying, sizing, and densification processes to produce solid biofuels like wood pellets from raw biomass. Slow and fast pyrolysis are discussed for producing solid charcoal and liquid bio-oil. Liquefaction and gasification are presented as methods for creating liquid and gaseous biofuels, along with anaerobic digestion to produce biogas. The document provides an overview of the key conversion techniques to transform biomass into different forms of bioenergy and biofuels.
Biomass gasification involves the partial oxidation of biomass at high temperatures to produce a combustible gas mixture known as syngas. There are two main types of gasifiers - fixed bed and fluidized bed. Fixed bed gasifiers include updraft, downdraft, and crossdraft varieties which differ in how biomass and air/steam move through the reactor. Fluidized bed gasifiers suspend biomass particles in an upward-flowing stream of air/steam. Syngas must be conditioned through cooling, cleaning, and tar/pollutant removal before use. While biomass gasification provides renewable energy with fewer emissions than fossil fuels, it also faces challenges with process complexity, sensitivity, and fuel quality requirements
This document discusses biomass combustion devices known as cookstoves. It provides a historical overview of cookstoves from early human history to modern times. It also classifies and compares different types of cookstoves such as traditional versus improved, natural draft versus forced draft, and direct combustion versus gasifier. The document outlines challenges to adopting improved cookstoves in India such as economic, social, and policy barriers. It concludes that providing access to modern cookstove technology is needed to protect billions of people still exposed to harmful emissions from traditional cookstoves.
This document discusses methods for characterizing biomass, including proximate analysis, ultimate analysis, and heating value determination. Proximate analysis measures the biomass moisture content, volatile matter, ash content, and fixed carbon. Ultimate analysis determines the biomass composition of carbon, hydrogen, nitrogen, sulfur, and oxygen. Heating value represents the heat released during combustion and is usually expressed as higher or lower heating value. Characterizing biomass through these analytical methods provides essential data for designing biomass conversion processes.
The document discusses biogas purification techniques. It begins by defining biogas and describing its production through anaerobic digestion of organic waste. The main processes that occur in digestion tanks are then explained. It also details the typical composition of impure biogas and desired composition after purification. The two main steps of purification treatment, cleaning and upgrading, are introduced. Several key techniques for biogas cleaning and purification are then outlined, including water scrubbing, membrane processes, adsorption methods, and biological techniques. Cryogenic separation is also briefly discussed.
The document discusses India's bioenergy policies and strategies. It provides details on:
- India's power generation capacity mix, with coal being the largest source at 56.2%
- India's renewable energy targets of 40% of power from non-fossil fuel sources by 2030 and installing 175 GW of renewable capacity by 2022
- Bioenergy programs in India including waste-to-energy, biogas, and national biofuels policy aimed at blending ethanol and biodiesel into transportation fuels.
This document discusses Bio-CNG (biodegradable compressed natural gas), which is produced from biogas through additional processing. Biogas is produced from biomass and contains primarily methane and carbon dioxide. To produce Bio-CNG, the biogas undergoes biological desulphurization to remove hydrogen sulfide, followed by upgrading using water scrubbers or pressure swing adsorption to increase the methane content. The methane-rich gas is then compressed to high pressures between 20-25 MPa and stored for use. Bio-CNG has advantages over fossil fuels as it is renewable, has a high calorific value suitable for vehicles, and produces lower greenhouse gas emissions. However, producing Bio-CNG also faces
This document discusses the biochemical conversion process of biomass to biofuels. It involves several steps: pre-treatment to make biomass accessible, detoxification to remove inhibitory compounds, hydrolysis to break biomass into sugars, and fermentation to convert sugars into biofuels like ethanol. Pretreatment uses physical, chemical or biological methods to disrupt biomass structure. Hydrolysis can be done with acids or enzymes. Fermentation is often done with yeast and can occur in batch, fed-batch or continuous modes. Overall, biochemical conversion is an efficient pathway to produce biofuels and bioproducts from lignocellulosic biomass.
The document discusses different types of biomass available for energy production. It describes biomass as organic matter derived from plants and animals that can be used as an energy source. The main types of biomass discussed are energy crops, agricultural residues, and animal wastes. Energy crops include food and oil crops that can be grown as fuel. Agricultural residues are byproducts of crop harvesting and processing. Animal wastes can be converted to biogas through anaerobic digestion or other thermal processes.
This document discusses agro-residues and their potential utilization. It defines agro-residues as by-products generated after harvesting and processing agricultural crops. Major agro-residues include rice straw, wheat straw, bagasse, and cornhusk. Currently, most residues are burned or dumped, but they represent an abundant, renewable resource. The document examines using agro-residues for applications like textiles. It highlights bagasse's suitability due to its high cellulose content. Developing agro-residue value chains could provide farmers additional income while benefiting the environment. Further research is needed to extract high quality fibers from residues like bagasse and cornhusk.
The document appears to be a series of scanned pages from an unknown source. It contains no text and only shows "Scanned by CamScanner" repeated across multiple blank pages. There is no other discernible information, content, or context provided in the document.
Biomass is plant or animal material that can be used as a fuel to produce electricity or heat. It forms through photosynthesis and is composed of carbon, hydrogen, oxygen, nitrogen, sulfur and moisture. Biomass is a renewable source of energy that can help reduce greenhouse gas emissions. It provides around 14% of global energy supply and is widely used for electricity, transportation biofuels and heating. Pyrolysis is the thermal decomposition of biomass into biochar, bio-oil and gases, and offers a flexible way to convert solid biomass into a liquid that is easier to store, transport and use to produce heat, power and chemicals.
This document discusses calculations of air-fuel ratios in carburators. It first describes the basic components and airflow in a simple carburator. It then presents equations for determining the theoretical mass airflow rates of both air and fuel through the carburator, taking into account factors like compressibility of air, pressure differences, temperatures and densities. The document concludes that the air-fuel ratio depends on factors like the venturi throat diameter, fuel jet diameter, pressure difference across the venturi and densities of air and fuel. It also provides an example problem solving for the air-fuel ratio of a carburator with given specifications under two conditions, neglecting and accounting for the fuel nozzle tip.
The document discusses four-stroke and two-stroke engines. It provides animations and explanations of the operating cycles of both engine types, including the individual strokes in each cycle. It also compares the two engine types, noting advantages and disadvantages of each, such as two-stroke engines being lighter and simpler but less fuel efficient and longer lasting than four-stroke engines. Application examples are given for both spark ignition and compression ignition engine types.
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2. Unit-2: Energy Accounting Framework
Content
• Economic theory of demand
• Production and cost market structure
• National energy map of India
• Energy subsidy – National and international perspectives
2
3. The Economics of Demand
3
What Is Demand Theory?
•Demand theory is an economic principle relating to the
relationship between consumer demand for goods and
services and their prices in the market
•Demand theory forms the basis for the demand curve, which
relates consumer desire to the amount of goods available
•It describes the way that changes in the quantity of a good or
service demanded by consumers affects its price in the
market
•The theory states that the higher the price of a product is, all
else equal, the less of it will be demanded, inferring a
downward sloping demand curve
•Likewise, the more demand that occurs, the greater the price
will be for a given supply
4. Economics of Demand
Need to discuss
• The Demand Curve
• Elasticity of Demand
• Changes in Demand
4
5. Demand Curve
• Explain the law of demand
• Interpret a demand schedule and demand curve
5
6. Demand Curve
• Demand
• Law of demand
• Marginal utility
• Law of diminishing marginal utility
• Demand curve
• Quantity demanded
• Individual demand
• Market demand
6
7. Demand & Law of Demand
•Demand indicates how much of a product
consumers are both willing and able to buy at
each possible price during a given period, other
things remaining constant
•The law of demand says that quantity demanded
varies inversely with price, other things constant.
Thus, the higher the price, the smaller the
quantity demanded
7
8. Law of Demand
• Demand, wants, and needs
• Substitution effect
• The change in the relative price (the price of one good
relative to the prices of other goods) causes the
substitution effect
• If all prices changed by same margin, there would be
no substitution effect
• Income effect
• Money income – the number of dollars you receive per
period
• Real income – measure in terms of how many goods and
services you can buy
• Diminishing marginal utility
• Marginal utility – additional satisfaction you derive from
each item
• Law of marginal utility you derive from each additional
item consumed decreases as your consumption increases
(example: pizza slices) 8
9. Contd…
•Diminishing marginal utility
•Marginal utility – additional satisfaction you
derive from each item
•Law of marginal utility you derive from each
additional item consumed decreases as your
consumption increases (example: pizza slices)
9
12. Demand Curve for Pizza
12
8 14 20 26 32
Millions of pizzas per week
150
120
90
60
30
0
Price
per
pizza
a
b
c
d
e
D
13. Individual Demand for Pizzas
13
120
80
40
1
(c) Alok
120
80
40
1 2
(b) Prithvi
120
80
40
Price
1 2 3
Pizzas (per week)
(a) Himanshu
dH
d
P d
A
14. Market Demand for Pizzas
14
120
80
40
Price
1 2 3
Pizzas (per week)
(d) Market demand for pizzas
6
dH
dP
dA
D
+ + =
15. Elasticity of Demand
• Compute the elasticity of demand and
explain its relevance.
• Discuss factors that influence elasticity of
demand
15
16. Computing the
Elasticity of Demand
•Elasticity of demand measures the percentage
change in quantity demanded divided by
percentage change in price
16
Elasticity
of
demand
=
Percentage change in
quantity demanded
Percentage
change in price
17. Computing
Elasticity of Demand
•Elasticity values
• >1 it is elastic
• Percentage change in price will result in larger percentage
change in the quantity demanded
• =1 it is unit-elastic
• <1 it is inelastic
• Demand is usually more elastic at higher prices and
less elastic with lower prices
•Elasticity and total revenue
• Price x’s quantity demanded at that price
17
18. The Demand for Pizza
18
8 14 20 26 32
Millions of pizzas per week
150
120
90
60
30
0
Price
per
pizza
D
19. Determinants of
Demand Elasticity
• Availability of substitutes
• The greater the availability of substitutes for a good, the
greater the good’s elasticity of demand
• Share of consumer’s budget spent on the good
• Increase in prices reduced the demand because people
are not both willing and able to purchase @ higher
prices
• A matter of time
• The longer the adjustment period, the greater the
consumer’s ability to substitute
• Some elasticity estimates
• The elasticity of demand is greater in the long run
because consumers have more time to adjust
19
20. Demand Becomes
More Elastic Over Time
20
50 75 95100
Millions of gallons per day
0
1.25
1.00
Price
per
gallon
Dy
D m
Dw
21. Selected
Elasticities of Demand
Product Short Run Long Run
Electricity (residential) 0.1 1.9
Air travel 0.1 2.4
Medical care and hospitalization 0.3 0.9
Gasoline 0.4 1.5
Movies 0.9 3.7
Natural gas (residential) 1.4 2.1
21
22. Other Determinants of Demand
•Consumer Income
•The prices of related goods
•The number and composition of
consumers
•Consumer expectations
•Consumer tastes
22
23. Changes in Consumer
Income
•If income ↑, consumers willing and able to buy more
which ↑ demand
•Demand curve shifts to the right
•Two categories of goods:
•Normal goods – demand increases as money
income increases
•Inferior goods – demand decreases as money
income increases
•Examples: used clothing, bus rides, etc.
23
24. Changes in the Prices of Related
Goods
•Substitutes
•Decrease in price of one item will reduce the
demand for a substitute
•Example: Tacos and Pizza
•Complements
•Certain goods used together
•Example: airline tickets and car rentals
•A decrease in the price of one shifts the demand
of the other rightward
24
25. Cont…
•Changes in size or composition of the population
will increase demand and shift the curve to the
right
•Changes in consumer expectations can shift the
demand curve to the left or the right
•Changes in consumer tastes
•Tastes are your likes and dislikes as a consumer
25
26. Movement along the Curve
•Movement vs. Shift
•A change in price, causes a movement
along the demand curve, changes the
quantity demanded
•A change in one of the determinants of
demand other than price causes a shift of
a demand curve
26
27. Extensions of Demand Analysis
•Role of time
•Your willingness to pay more for time-
saving goods depends on the opportunity
cost of your time!
27
28. Energy subsidy – National and
international perspectives
What is Subsidy?
• A subsidy, often viewed as the converse of a tax, is an
instrument of fiscal policy. It is derived from the Latin word
'subsidium‘, means a subsidy literally implies coming to
assistance from behind.
• Subsidies are a kind of incentive which play an important
role in economic development of developing countries
• Subsidies bring out desired changes by effecting optimal
allocation of resources, stabilizing the price of essential
good & services, redistributing income in favour of poor
people thus achieving the twin objective of growth &
equity of nation.
28
29. 29
The objective is subsidy is often creating a wedge between
consumer prices and producer costs which lead to:
• changes in demand/ supply decisions
• inducing higher consumption/ production
• offsetting market imperfections including internalisation of
externalities
• achievement of social policy objectives including
redistribution of income, population control, etc.
• Subsidies, by means of creating a wedge between
• consumer prices and producer costs, lead to changes in
• demand/ supply decisions
30. Advantages of Subsidy
• Reduces cost of production
• To increase consumption and production, the government
can offer a subsidy to reduce the price and increase quantity
• Enables greater social efficiency. Consumers end up paying
the socially efficient price which includes the external benefit.
30
31. • Subsidy = P0 -P2
• The supply curve shifts to S2 and Price falls from P1 to P2
• People will now consume more at Q1
• Q1 = Social Efficiency: because SMC = SMB
Disadvantages of Subsidy
• According to the UNESCO, India has the lowest public
expenditure on higher education per student in the world.
• As much as 39% of subsidised kerosene is stolen.
• Subsidies may also lead to perverse or unintended
economic effects.. They would result in inefficient resource
allocation if imposed on a competitive market.
• By diverting economic resources away from areas where
their marginal productivity would be higher. Generalised
subsidies waste resources. 31
32. • A price control may lead to lower production and shortages
and thus generate black markets resulting in profits to
operators in such markets and economic rents to privileged
people who have access to the distribution of the good
concerned at the controlled price
32
33. Effects of Subsidies
• A locative effects: these relate to the sectoral allocation of
resources. Subsidies help draw more resources towards the
subsidized sector
• Redistributive effects: these generally depend upon the
elasticities of demands of the relevant groups for the
subsidized good as well as the elasticity of supply of the
same good and the mode of administering the subsidy
• Fiscal effects: subsidies have obvious fiscal effects since a
large part of subsidies emanate from the budget. They
directly increase fiscal deficits. Subsidies may also indirectly
affect the budget adversely by drawing resources away from
tax-yielding sectors towards sectors that may have a low
tax-revenue potential.
33
34. • Trade effects: a regulated price, which is substantially lower than
the market clearing price, may reduce domestic supply and lead
to an increase in imports. On the other hand, subsidies to
domestic producers may enable them to offer internationally
competitive prices, reducing imports or raising exports
Other Effects
• Subsidies have some fiscal effects since a large part of subsidies
emanate from the budget. They directly increase fiscal deficits
• Subsidies may also indirectly affect the budget adversely by
drawing resources away from tax-yielding sectors towards
sectors that may have a low tax-revenue potential
• A regulated price, which is substantially lower than the market
clearing price, may reduce domestic supply and lead to an
increase in imports.
34
35. •On the other hand, subsidies to domestic
producers may enable them to offer
internationally competitive prices, reducing
imports or raising exports.
•Subsidies have a tendency to self-perpetuate.
They create vested interests and acquire political
hues.
•It is difficult to control over subsidy in India as it
transmitted through market which has much
more imperfections.
35
36. Rationale of Subsidies
• Subsidies are justified in the presence of positive
externalities because in these cases consideration of social
benefits would require higher level of consumption than
what would be obtained on the basis of private benefits
only
• Subsidies, as converse of an indirect tax, constitute an
important fiscal instrument for modifying market
determined outcomes. While taxes reduce disposable
income, subsidies inject money into circulation.
• Subsidies affect the economy through the commodity
market by lowering the relative price of the subsidized
commodity, thereby generating an increase in its demand
36
37. • With an indirect tax, the price of the taxed commodity
increases, and the quantity at which the market for that
commodity is cleared, falls, other things remaining the same
• Taxes appear on the revenue side of government budgets, and
subsidies, on the expenditure side
37
38. Classification of Subsidies
•Public Good-defense, Police & General
administration( non rivalry,
•excludability)
•Merit Good- Protection against disease,
environmental protection, education
(external benefit to society)
•Non Merit-Individual customer
38
39. Different Types of Subsidy
1. Cash Subsidy: Providing food or fertilizer to
consumer at lower price.
2. Interest or credit subsidies
3. Tax subsidies
4. In kind subsidies
5. Procurement subsidies
6. Regulatory subsidy
39
40. Subsidies in India
40
• Subsidies have increased in India for several reasons. In
particular this proliferation can be traced to
1)the expanse of governmental activities
2) relatively weak determination of governments to
recover costs from the respective users of the subsidies,
even when this may be desirable on economic grounds, and
3) generally low efficiency levels of governmental activities.
41. 41
• In the context of their economic effects, subsidies have
been subjected to an intense debate in India in recent
years. Some of the major issues that have emerged in the
literature are indicated below:
1. Whether the magnitude and incidence of subsidies, explicit and
implicit, have spun out of control; their burden on government
finances being unbearable, and their cost being felt in terms of a
decline of real public investment in agriculture.
2. Whether agricultural subsidies distort the cropping pattern and
lead to inter-regional disparities in development
3. Whether general subsidies on scarce inputs like water and
power have distorted their optimal allocation
4. Whether subsidies basically cover only inefficiencies in the
provision of governmental services
5. Whether subsidies like (food subsidies) have a predominant
urban bias
6. Whether subsidies are mistargeted
42. 7. Whether subsidies have a deleterious effect on general
economic growth of sectors not covered by the subsidies
8. Whether agricultural subsidies are biased against small and
marginal farmers
9. How should government services be priced or recovery rates
determined
10. What is the impact of subsidies on the quality of environment
and ecology
42
43. Central Goverment Subisdies
Trends in the subsidies given by Central
Government ( Year 1994-95)
• The bulk of the Central Govt's subsidies arise on the provision
of economic services, which account for 88% of thetotal
subsidies (10% on merit services and 78% on non-merit)
• The recovery rates in the social end economic services are
very low (around 10%)
• Subsidies on non-merit goods are more than five times those
on merit goods, which reflects on an unduly large and ill-
directed subsidy regime.
• The bulk of subsidies on merit goods go for the construction of
roads and bridges, followed by elementary education and
scientific research
• Amongst non-merit services, the biggest recipients are
industries and agriculture and allied services
43
44. • 78% of subsidies which go for non-merit economic services
are amenable to economic pricing.
• Even if one allows for a part of these subsidies being given
in the interest of redistribution or provision of human
needs, a substantial part must be due to inefficiency costs of
public provision of these services and/or inessential input
or output subsidies
• Subsidies to Central Public Enterprises are estimated
separately as the excess of imputed return on the equity
held and loans given by the central government to these
enterprises, over actual receipts in the form of dividends
and interests.
• Subsidy in this manner is calculated for each enterprise.
They are aggregated according to cognate groups.
44
45. EXPLICIT
• The most important explicit subsidies administered through
the Central Government budget are food and fertilizer
subsidies, and until recently, export subsidies
• These subsidies account for about 30% of the total central
subsidies in a year and have grown at a rate of approx 10%
per annum over the period 1971-72 to 1996-97.
• The relative importance of different explicit subsidies has
changed over the years. E.g., food subsidies accounted for
about 70% of total Central explicit subsidies in 1974-75
• Since then, its relative share fell steadily reaching its lowest
of 20.15% in 1990-91. Thence onwards, it has risen steadily
reaching a figure of 40% in 1995-96
45
46. • Export subsidies have been on the decline except for the
spurt in the late 1980s, whereas the relative share of the
food subsidies has been rising although in a cyclical pattern.
• As a proportion of GDP, explicit Central govt. subsidies were
just about 0.305 in 1971-72. they continued to increase
steadily reaching a peak of 2.38% in 1989-90
46
47. State Government Subsidies
• Subsidies given by 15 non-special category States were estimated
for 1993- 94, the latest year for which reasonably detailed data
were available for all these States
• The trends thrown up by the study are:
• Subsidies in social services and economic services both constitute
half each of the total subsidies given by the States.
• The proportion of merit subsidies is much higher in social services
visà-versa economic services
• The overall recovery rate is 5.81% of the total cost (less than 2%
in social services and approx. 9% in economic services).
• There is a distinct tendency for the per capita subsidies to rise as
the per capita incomes rise.
• None of the 15 States spends more than 30-35% of total subsidies
on merit goods.
47
48. • None of the 15 States spends more than 30-35% of total
subsidies on merit goods.
• The recovery rates for merit services show variation in a
narrow band whereas the largest variations are recorded for
recovery rates for non-merit economic services
• The near zero surpluses for all services show that subsidies
are mainly financed by tax-revenues and borrowing in the
States.
• More than one-fifth of non-merit social subsidies accrue to
education, sports and art & culture
• In economic services, irrigation accounts for nearly a quarter
of services whereas power accounts for around 12%.
• Lastly, subsidies to States' public enterprises are large but
recovery in the form of interests and dividends is extremely
low.
48
49. Central and State-Aggerate
Subsidies
• Total non-merit subsidy for the Central and State
governments taken together amount to Rs. 1021452.4
million in 1994-95, which is 10.71% of GDP at market prices.
The share of Central government in this is 35.37%, i.e.
roughly half of corresponding State government subsidies
• The recovery-rate for the Centre, in the case of non-merit
subsidies, is 12.13%, which is somewhat higher than the
corresponding figure of 9.28% for the States
• The difference in recovery rates is striking for non-merit
social services, being 18.14% for the Centre and 3.97% for
the States. It is only marginally different for non-merit
economic services (11.65% for Centre and 12.87% for
States) where, in fact, States do better
49
50. 50
• The total non-merit subsidies for the year 1994-95
amounted to 10.71% of GDP at market prices, resulting in a
combined fiscal deficit of 7.3% for the Centre, States and
Union Territories
• Therefore, if these subsidies were phased out, the same
would have a discernible impact on the fiscal deficit
• It can be done by increasing the relevant user charges,
which would also lead to a reduction in their demand
51. 51
Economic
Subsidies
Agriculture &
Cooperation
(16.4)
Irrigation &
Flood Control
(10.8)
Power & Energy
(7.6)
Industry (11.5) Transport (7.3)
Communication
& others (2.4)
Social
Subsidies
Education
(22%)
Health
(9%)
Water Supply
& Sanitation
(5%)
Rural
Housing and others
In India subsidies can be classified in two categories
52. Inter state variation
• Proportionate distribution of subsidy is not done
• Panjab, Haryana, Maharashtra,& Gujrat has 20% of
population of India But they get 26% of subsidy
• Where as U.P., MP, Bihar & Orissa has 40% of population but
they get 31% of subsidy
• Bihar has more then 33% population below poverty line
compared to other states but receive less then 40% of
average subsidy where in Punjab poverty is 54% less then
average gets more the 40 % of average subsidy
• In Panjab, Haryana, Maharashtra,& Gujrat 18% of rural
population gets 25% of Subsidy where as in UP, MP, Bihar &
Orissa 44% of rural population gets 29% of subsidy
52
53. Different Definitions of Energy Subsidies and
Their Strengths and Weaknesses at
International Level
Definition Focus/
Methodology
Strengths WEAKNESSES
Organisation For Economic Co-operation
And Development (Oecd)
“Both direct budgetary
transfers and tax
expenditures that in some
way provide a benefit or
preference for fossil fuel
production or consumption
relative to alternatives.”
• The inventory
of support is first step to
identifying
subsidies to a sector
• Inventory
approach
• Broad
definition of
“support”
• Inventory
approach adds
to transparency
Can miss a range of
supports delivered
via price measures
(prevalent in
developing countries)
• No estimates for
nuclear or renewable
subsidies
World Bank (WB)
A deliberate policy action by
the government that
specifically targets fossil
fuels, or electricity or heat
generated from fossil fuels.
Support countries in their
subsidy measurement
Good overview
of approaches
to subsidy
calculation
No recent subsidy
calculations
of their own
• No estimates for
nuclear or renewable
subsidies
53
54. Contd..
Definition Focus/
Methodology
Strengths Weaknesses
World Trade Organization (WTO)
A financial contribution by a
government or any public
body within the territory of a
Member”, or when “There is
any form of price support
(where) a benefit is thereby
conferred.
How energy subsidies distort
trade
Dispute settlement
Near universal
Acceptance
Often referenced
Used by many as basis for
their analysis
Not widely used by
some of the main
institutions involved in
subsidy reform
International Energy Agency (IEA)
“Any government action
directed primarily at the energy
sector that lowers the cost of
energy production, raises the
price received by energy
producers or lowers the price
paid by energy consumers. It
can be applied to fossil and non-
fossil energy in the same way.”
On consumer subsidies,
rather than producer
subsidies
• Fossil and renewables
• Price-gap approach
•Broad definition
•Explicitly covers all
energy
• Applied only to
consumer subsidies
• Disagreement over
reference prices
• Can miss a range of
subsidies
• No nuclear numbers
54
55. Contd..
Definition Focus/
Methodology
Strengths Weaknesses
International Monetary Fund (Imf)
“Pre-tax consumer
subsidies arise when the
prices paid by consumers,
including both firms
(intermediate
consumption) and
households (final
consumption), are below
supply costs including
transport and distribution
costs.
Producer subsidies arise
when prices are above this
level. Post-tax consumer
subsidies arise when the
price paid by consumers is
below the supply cost of
energy plus an appropriate
“Pigouvian” (or
“corrective”) tax…”
Understanding
magnitude of
subsidies to
support reform
• Price-gap
and inventory
approach
Includes unpriced
Negative externalities
• Data intensive
• No estimates for
nuclear or renewables
55
56. Selected country and regional estimates
of renewable energy subsidies in 2017
Power
generation
Usd billion
Calculation
Method
Biofuels
Usd billion
European
Union*
78 Inventory and
Price-gap
10.9-11.9 Price-gap
China -5 Inventory 0.4 Price-gap
Japan 9 Inventory -0.2-0.3 Price-gap
United States 6.7 Inventory 14.1 Inventory and
price-gap
India 2.2 Price-gap 0.9 Price-gap
56
58. Energy independence to be first and highest priority. We
comprehensive energy security creating . an energy asset
profile our nation’s must achieve by 2020 by that allows our
economy to function with necessary abandon. We must
concurrently strive to achieve energy independence by 2030
through accretions to our traditional stockpiles and strategic
reserves as also skilful use of alternate and renewable sources
of energy.
President APJ Abdul Kalam
VISION FOR NATIONS
59. Energy Security International Market
• Global oil prices entering the "super-pike" phase
• Sustained price rise Vs growth rate & inflation
• Oil prices have crossed $70 per barrel
• High annual oil imports
• High energy consumption than that of any developed
country
• Insulation from ever-volatile international energy market
.
.
.
60. India Energy Status in World
India is both a major energy producer and consumer
Eleventh greatest energy producer, accounting for about 2.4%
of the world’s total annual energy production
World’s sixth greatest energy consumer, accounting for about
3.3% of the world’s total annual energy consumption
Despite its large annual energy production, India is a net
energy importer, mostly due to the large imbalance between
oil production and consumption
India ranks fifth in the world in terms of energy consumption.
Commercial energy consumption in India 3.5% of the world
consumption in 2002
Average annual growth rate of energy consumption about
6% during 1981 -2002
61. THE LOOMING CRISIS
India has proven oil reserves of less than
6.5 years of our total present consumption
World crisis ahead in the next few years
Indian crisis even more severe !
Unprecedented growth in hydrocarbon consumption –
gasoline the highest
Biofuels one of the most adaptable options
62. Energy Scenario in India
India is both a major energy producer and consumer.
Eleventh greatest energy producer, accounting for about
2.4% of the world’s total annual energy production.
World’s sixth greatest energy consumer, accounting for
about
3.3% of the world’s total annual energy consumption.
Despite its large annual energy production, India is a net
energy importer, mostly due to the large imbalance between
oil production and consumption
Commercial energy consumption in India is 3.5% of the
world consumption.
Average annual growth rate of energy consumption is about
6% during 1998 - 2007.
63. Energy Sources – Indian Scenario
33%
8%
53%
1% 5%
Oil
LNG
Coal
Nuclear
Hydro
64. Major Concerns in Energy Sector in India
Growing gap between demand and supply of commercial energy:
electricity, oil and gas.
Oil intensification of Indian economy due to declining self
sufficiency in oil and increasing oil demand.
Growing dependence on non-commercial energy sources like
fire-wood, cow-dung and agricultural wastes in rural areas.
Inadequate development of eco-friendly energy sources
Including hydro and renewable energy.
Urgency for controlling environmental pollution caused by
burning of fossil fuels and biomass energy.
Need for sustainable energy pathway for India which will ensure
energy security.
65. India’s current energy basket is coal dominated and is
likely to stay this way in the near future. Limited
domestic coal supply coupled with its poor quality.
Low level of technological advancements and high
instance of environmental perils pose serious
challenges for over dependence on coal.
Limited domestic reserves and uncertain foreign supply
of hydrocarbons in wake of their rising international
price have seriously impaired country’s energy security.
66. Energy Gaps
Approximately 2.4 billion people use traditional
biomass for cooking
Still 1.6 million people lack access to Electricity
World’s energy needs will be up by 60% by the year
2030 with fossils fuel still being the dominant energy
mix
Indoor biomass stoves kills up to 1.6 million
Women and children in developing countries
67. SOME MORE PROBLEMS
Tarapur nuclear reactor requires refueling
Gas pipeline from Turkmenistan, through
Pakistan, but questionable reserves
Gas pipeline from Myanmar through
Bangladesh discouraged by U.S.
Protests against hydro-electricdam at
Narmada
68. Energy Requirement of
India
Over the next 25 years, six fold increase projected
in electricity and four fold increase in crude oil
70. Future Scenario - 2030
Global production of oil - peak by 2030
60% of new investments in energy – electricity
Renewable energy - meet 14% (world’s total primary
energy demand) - to remain same in 2030
Share of biofuels (transportation) - 1% but
will go to 3% by 2030
71. Other Options
Renewable are indigenous, non-depleting,
modular and environment-friendly
Renewables can provide energyaccess and meet
unmet demand
Provide captive energy thus conserving fossil fuels and
electricity
Supplement fossil fuels in transportation
Renewables can contribute to energy
Security in a sustainable manner
72. TYPES OF ENERGY
FOSSIL FUELS OIL & NATURAL GAS WITH COAL
INDEGINIOUS PRODUCTION
HYDROGEN
NUCLEAR ENERGRY
BIOMASS TECH
BIOFUEL
ETHANOL BLEND
ENERGY FROM WASTE
RENEWABLE ENERGY
SOLAR
WIND
HYDRO
TIDAL
73.
74. QUESTIONS
How to ensure that planning for energy is not done in isolation?
How to manage two conflicting issues, especially in the
developing countries going for a green growth where majority
of the population still lacks basic energy services?
How to mobilize resources to create access to modern energy
services, given the background of rising energy insecurity and
economic instability due to rise in the oil prices?
76. • Renewable energy is the energy which is used &
renewed. Its sources could be derived from sun, wind,
water etc.
• There is no dearth of its sources
• Sunlight falling on the united state in one day contains more
then twice the energy we consume in an entire year
78. Renewable Energy: Better Option
Renewable energy (re) is a preferred option for india
Large untapped re potential
Vast land resources for production of biomass &
bio-fuels
Abundant sunshine
Increase in population and growing consumption
Plentiful sites for harnessing windenergy and small
hydro
Why renewable energy is particularly relevant for rural
India
No access to on grid sys for rural population.
Vision 2012
79.
80.
81.
82. Importance of Stand-alone Renewable
Systems
Stand-alone re systems are economically viable
Standalone re systems shall :
Avoid the high costs involved in transmission capex.
Avoid distribution losses – technical & otherwise
Avoid recurring fuel cost
Boost the rural economy
Encourage self help groups & self dependence
Enable villageco-operatives to supply and/ or
monitor distribution
Make available much needed energy for basic needs
at the doorstep at affordable prices.
Brings gain for Indian economy.
83. SOLAR POWER PROGRAMME
Earliest source of energy known to the mankind.
Salient features – wide-spread distribution, environment
friendly, and virtually inexhaustible supply
India receives solar energy equivalent to
Over 5000 trillion kwh/year.
86. WIND ENERGY
We have used the wind as energy source for a long time.
Chinese were using it to pump water for irrigating crops 4000
years ago. In Europe wind power was used in middle ages to
grind corn, which is where the term “wind mill” comes from.
91. HYDEL ENERGY
WE HAVE USED RUNNING WATER AS ENERGY SOURCE FOR
THOUSAND OF YEARS FOR GRINDING CORN. THE FIRST
HOUSE IN THE WORLD TO BE LIT BY HYDRO ELECTRICITY
WAS CRAGSIDE HOUSE IN ENGLAND IN 1878
103. TIDAL ENERGY
Tidal energy is produced by using the kinetic energy of
the tides.
In order to produce some practical amounts of power
(electricity), a small difference between the high and
low tides of at least say five metres in required.
Dam is built across a river estuary. When the tides goes
in and out, the water flows through tunnels in the dam.
Power is generated as hydro electric power.
105. TIDAL ENERGY AT A GLANCE
Exploitations of tidal energy is in initial stage, no
project installed so far.
The main potential sites for tidal power generation in India
are the Gulf of Kutch and the Gulf of Khambat (Cambay)
and the Gangetic Delta in the Sundarbans area of West
Bengal.
Salient features:-
Once built, tidal power is free
It needs no fuel
Not expensive to maintain
Tides are totally perdictable
Building a dam across in estuary is expensive
Effect the habitat of birds and fish as it alter tidal
current
Can provide power for around 10 hrs/day
106. TIDAL POWER INDIA: TIDAL ENERGY
POTENTIAL IN EXCESS OF 15 GIGAWATTS
IN A WRITTEN REPLY
INDIA'S
STATE
MINISTER OF
FOR NON-
CONVENTIONAL
ENERGY SOURCES
ESTIMATED THAT OVER
15,000 MW OF TIDAL
POWER POTENTIAL HAS
BEEN ESTIMATED IN
THE COUNTRY
107. GEOTHERMAL ENERGY
Derived from greek word “geo” means earth and
“thermal” means heat
Working priciple
Hot rocks, underground heat, water to produce
steam.
Holes are drilled down to the hot region, steam
comes up, is purified and used to drive turbines,
which drive electric generators.
If there is no natural “ground water” in the hot
rocks, more holes are drilled and water is pumped
down to them.
109. PRESENT STATUS
Geothermal energy based power production over the
world has gone up from 5800 mw to 8400 mw from
1998 to 1999.
In India it is in initial stage, no geothermal power
Project installed.
Ongoing projects:
Tattapani geothermal area in madhya pradesh
Puga geothermal area in ladakh
More than 300 geothermal potential sites
110. THRUST AREAS
Creation of geothermal data base.
Geothermal resource and manpower development
Its application for power generation.
Editor's Notes
Starting point…With thanks to the peers and mentors at CES, for making me what I am today, especially Prof. Kaushik, Prof. Kandpal, Prof. Dutta, Prof. Tiwari for support and encouragement through discussion on R&D activities.
Also I am grateful to Head CES, Prof. Dutta for giving me an opportunity to present what I have done so far and what I could do in Future here provided I pass the test and standards laid down by my peers? Let me assure you that I intend to do my very best!