This document defines demand and discusses its key determinants such as price, income, and preferences. It also outlines the law of demand, which states that demand increases when price decreases and decreases when price increases, assuming other factors stay constant. Finally, it introduces the concept of elasticity of demand and how it measures the responsiveness of quantity demanded to changes in price or other factors that affect demand.

1. SOURCES: http://220.227.161.86/16781Demand_n_Elasticity.pd
1. Introductory Microeconomics and Macroeconomics - TR Jain, VK .Ohri
2. Managerial Economics-Dominick Salvatore

2. By: Gaurav Wadhwa
Definitions Of Demand
 Demand refers to the Quantities of Commodity that the
consumers are able to buy at each possible price during a
given period of time, other things being equal.
 Demand is the Ability and willingness to buy Specific
Quantity of the good at Alternative Prices in given Time
Period, Ceteris Paribus.

4. Determinants of Demand:
 Price of the Commodity
 Price of Related Commodities
 Change in income of consumer
Taste and Preferences of Consumers
 Other Factors

5. Price of Related Commodities

6. Change in income of consumer
 Demand for normal goods tend to increase with
increase in income, and vice versa.
 Demand for inferior goods like coarse grain tends
to decrease with increase in income, and vice
versa.

7. Law Of Demand
 Law Of Demand states that people will buy more at lower
price and by less at higher price, Ceteris paribus
By: Samuelson
 The Law Of Demand states that quantity demanded
increases with fall in price and diminishes when Price
Increases, other thing being equal.
By: Marshall
By: Probir Roy

8. Explanation
 Law Of Demand may be explained with the help of
Demand Schedule:
It is defined as a Table which
shows quantities of a Given
Commodity which an individual
consumer will buy at all possible
prices at a given time.

9. Demand Curve
The Demand Curve slopes
downwards from Left to Right,
meaning thereby that when Price
is High Demand is Low and Vice
Versa.

10. Assumptions To Law
 Consumers are rational
 Consumer’s income remains constant
 Consumers do not expect a change in price in the
future
 There is no change in the price of substitute and
complementary goods
 There is no change in tastes, fashions, etc of
the consumer
 Goods should be normal

11. By: Mayank Sharma
Expansion And Contraction Of Demand

12. Diagram

13. Increase And Decrease Of Demand

14. Diagram

15. By: Rohit Lamba
Elasticity Of Demand
 It Answers the “Question By How Much”?
 Elasticity of Demand is defined as the responsiveness of the quantity
demanded of a commodity to change on one of the variable on which
demand depends.

17. Price Elasticity Of Demand
 It is Measured as a percentage Change in Quantity Demanded divides
by Percentage Change In Price, Other thing Remaining Same.

18. Degrees Of Price Elasticity Of Demand

19. Determinants
 Availability of Substitutes
 Position of Community in consumer’s Budget
 Nature of need that a community satisfied
 Number of uses to a community is put
 Period
 Consumer Habits

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