Demand is determined by price, income, tastes, number of consumers, and substitute products. The demand equation shows quantity demanded (Qd) as a function of these factors. The law of demand states that as price increases, demand decreases, and vice versa. A change in demand refers to a change in the quantity purchased in response to a price change. Price elasticity of demand measures the responsiveness of quantity demanded to a price change. Income elasticity of demand measures the responsiveness of quantity demanded to a change in income. Cross elasticity of demand measures the responsiveness of quantity demanded for one good to a price change in another good.

4. DEFINATION OF DEMAND

5. Determination of demand
• Price (p)
• Income (y)
• Taste fashion (T)
• No of consumer (N)
• Substitute product (Pi)
• Qd=F(P,Y,T,N,Pi)
• Qd=f(p)
• Qd=a-bp(demand equation)

6. Law of demand
• As price increase, demand
decrease and vice versa

7. Change in demand
• A change in the quantity
demanded is a change in the
quantity of the product purchase
in response to a change in its
price

8. Demand vs quantity demand

9. Price elasticity of demand
• The price elasticity of demand measures the
percentage change in quantity demanded of a
commodity divided by the percentage change
in its price.(change in quantity demanded due
to change in price )

10. ED=1
•When change in qd
=change in price

11. ED greater than 1
• When change in quantity
demanded greater than
change in price.

12. ED less than 1
• When change in qd less than
change in price

13. Infinite demand
• When price remain same but
qd changes

14. ED=0
• When prices change but qd
remain the same.

15. Income elasticity of demand
• Income elasticity of demand is a technical
term that shows how much change occur in
quantity demanded due to particular change
in the level of income
• Change in QD due o change in income.
• Change in qd/change in y *y/q

16. Cross elasticity of demand
• Change in QD due to change in price
• Cross elasticity of demand is a technical term
that shows how much change occurs in the
quantity demanded of one product due to a
particular change in the price of any other
product.