This document provides an overview of demand functions and factors that influence demand. It contains the following key points: 1) A demand function represents the relationship between quantity demanded and determinants of demand, such as price, population, and income. 2) Demand is inversely related to price and directly related to factors like population. 3) Demand functions can be quantifiable or not, depending on the variables, and firms have different levels of control over variables. 4) Examples of demand curves under different market structures like monopoly and oligopoly are provided.

1. SUBJECT- BUSINESS ECONOMICS I
CLASS- FYBAF/BBI/BMS/BCOM–SEM I
MODULE 2-CHAP3-DEMAND FUNCTION
PPT BY
DR. MRS. SNEHAL BHAGWAT (KAJVE)
MAT.K.M.PATEL SR.COLLEGE OF
COMM. & SCI.

17.  Represent a relationship between the quantity demanded &
determinants of demand
 Demand function includes some of possible variables , there
may be other variables also
 Demand is inversely related to some variables like price,
directly related to some like population
 Some variables are quantifiable & some are not
 Control on variables differs from firm to firm e.g. Customers,
interest rate etc.
POINTS TO BE NOTED IN A DEMAND
FUNCTION

18. Price per unit (Rs) Qty Demanded (Qx=a-b Px)
e.g Qx=100-5Px
4 100-5 *4 = 80
8 100-5*8=60
10 50
15 25
DEMAND FUNCTION FOR PRICE

19. PRICE, INCOME & SUBSTITUTION EFFECT

20.  Price effect= Income Effect+ Substitution Effect
PRICE EFFECT
Nature of Goods Income Effect Substitution Effect Price Effect
Normal (Necessary
Goods- like organic
Banana )
Positive Positive Positive
Inferior (e.g.. Bajara-
demand increases
with increase in
price)
Negative (Weak) Positive (Strong) Positive
Giffen (Rare form of
inferior goods- e.g.
bread, potato's- no
ready substitute)
Negative (Strong) Positive (Weak) Negative

21. NATURE OF DEMAND CURVE IN
DIFFERENT MARKETS

24. DEMAND CURVE UNDER MONOPOLISTIC

25. DEMAND CURVE UNDER OLIGOPOLY

26. CHAPTER 3 FINISHED
ANY DOUBTS?
THANK YOU