1. The document discusses concepts related to demand and supply, including definitions of demand and supply, factors that affect demand and supply, demand and supply curves, and the concept of market equilibrium. 2. Key points covered include definitions of demand as the quantity demanded at each price and supply as the quantity supplied at each price. Demand is affected by factors like income, tastes, and prices of related goods, while supply is affected by costs of production, technology, and prices of other goods. 3. Demand and supply curves show the relationship between price and quantity demanded/supplied. The curves intersect at the market equilibrium point where quantity demanded equals quantity supplied.

1. 1
created by
Sudip Simkhada
Class 12

2. The concept of economy
was develop by adom
smith as a science of
wealth
But latter the concept of
weal fear and scarcity
and choice also develop
2
1

3. Production
Distribution
Exchange
Consumption
International trade
Public finance
Economic development
3

4. Market
economy
controlled
economy
mixed
economy
4

5. “the term economic system refers to a
distinctive set of social and institutional
arrangement with in which answer are
provided by determining how resource are
allocated” r g lipsey
“in a type of economic system the decisions
about resource allocation are made without
any central direction but instead as a result
of innumerable independent decisions taken
by individual producers and consumers such
a system is known as a market economy” r
g lipsey and c harbury
5

6. Guided by
private sector
Guided by two
forces demand
and supply
Price is fix
6

7. Decentralize decision taking
Freedom of enterprise
Profit motive
Consumers sovereignty
Price mechanism
Perfect competition
Laissez faire [free trade]
7

8. Freedom for consumers
Mobility of factors of production
Efficient allocation of resources
Perfect competition
Technological innovation
Better standard of living
Incentive to work
Flexibility and automatic operation
Rich verity of goods and services
Economic growth
8

9. Economic
instability
Creates economic
inequality
Private sector
domination
Profit motive
Capital outflow
Possibility of
illegal trade
Failure of market
mechanism
Business
fluctuations
Exploitation of
workers
9

10. Guided by
government
Price is
determine
by
government
10

11. It is guided by both private
and government
11

12. Substitute goods
Complementary
goods
Independent
goods
12

13. Two goods are said to
be Substitute goods
when the increase of
price in one increase
the demand of other
E.g. tea and coffee
13

14. Two goods are said to
be complementary
goods when the
increase of price in one
decrease the demand
of other
E.g. pen and ink
14

15. Two goods are said
to be independent
goods if they don’t
have any relation
The change price of
one doesn’t affect
other
E.g. shoe and pen
15

16. It is a
willingness
to pay
Resources
aren’t
require
Time factor
doesn’t
affect
E.g. bagger
want car
16

17. “the demand for anything at a
given price is the amount of it
which will be bought per unit
time at that price”
ferdric benham
“the term demand is define as
the number of units of
particular goods and services
that consumers are willing to
purchase during a specific period
and under a given set of given
conditions” pappas and
beigham
“demand is the quantity that
will be purchase of particular
commodity at various prices at a
given time and place”
Milton h spencer
17

18. “demand refer to the quantities of a commodity
that the consumers are able and willing to buy at
each possible price during a given period of time
other things being equal” alferd marshal
“by demand we mean the various quantities of a
given commodity or services which consumers
would buy in one market in a given period of
time at various prices” bober
18

19. So we can
say that
the desire
with a
ability to
pay is
demand
19

20. Ability to pay
Willingness to pay
Price
Quantities
Product
20

21. “the demand curve for a commodity shows a relation
between its price and a quantity a household wishes
to purchase per period of time” r g lipsey
21

22. 0
10
20
30
40
50
60
10 20 30 40
price
02
0
22
Quantity
Price
Demand curve

23. It is the table
which show
relation
between price
and quantity
demanded
23

24. Price Quant
ity
dema
nd
10 50
20 40
30 30
40 20
24
Demand
schedule

25. It is a curve which
show the relation
between price and
quantity demand by
individual
household
25

26. It is a curve which
show the relation
between price and
quantity demand by
sum of all the
individual in the
market
26

27. Increase in
consumers
income
Increase in
size of
population
Increase in
taste and
preference
for
commodity
Increase in
price of
related goods
27

28. Decrease in
consumers
income
Decrease in
size of
population
Decrease in
taste and
preference
for
commodity
Decrease in
price of
related
goods
28

29. Price
demand
Income
demand
Cross
demand
Joint
demand
29

30. The change in
demand due to
change in price
is known as
price demand
30

31. The change in
demand due to
change in income
is known as
income demand
31

32. The change in
demand of one
good due to
change in price
of other good
is known as
cross demand
E.g. the rise in
price of tea
increase
demand of
coffee
32

33. The demand for
more than one
goods to fulfill
single purpose
is known as
joint demand
E.g. demand for
sugar milk
water and tea
to make hot tea
33

34. Law of
diminishing
marginal
utility
Income
effect
Substitution
effect
New
consumers
Put to less
important
uses
34

35. When price falls his
purchasing power
increase. It increase his
real income so he can
purchase more goods.
It is known as income
effect.
35

36. When price except
one good increase
than consumer
substitute more
towards that goods
than other. This
effect is known as
substitution effect.
36

37. F[p]=Q[d]
“other things being
equal, the higher the
price of a commodity, the
smaller is the quantity
demanded and lower the
price, the larger the
quantity demanded.”
37
Object Meaning
F[p] Factor of
production
Q[d] Quantity
demanded

38. 0
10
20
30
40
50
60
10 20 30 40
price
02
0
38
price
Quantity
Price Quant
ity
dema
nd
10 50
20 40
30 30
40 20

39. This figure
shows when
price fall
demand increase
and vice versa
39

40. No change in
income of
consumer
No change in
price of
related goods
No change in
taste and
fashion of
consumer
No change in
habit of
consumer
No
expectation of
future change
in price
No change in
size and
composition
of population
40

41. Judge by price
Geffen goods
Price expectation
Articles sold under two brand names
If shortage is feared
Out of fashion
Customs and tradition
Change in season
Necessaries of life
Change in income
41

42. 42
Price
Increase
in
demand
0
10
20
30
40
50
60
10 20 30 40
price
0
02
.
Decrease
in
demand
Quantity

43. Other thing
being equal
Base on
law of
demand
Price is change
In same
demand
curve
43

44. Price Quantity
20 30
10 50
44
Here with a decrease in price increase in demand

45. Price Quantity
40 30
50 20
45
Here with a
increase in
price decrease
in demand

46. 0
10
20
30
40
50
60
70
80
10 20 30 40
first
second
third
46
Increas
e in
deman
d
Decrea
se in
deman
d

47. Price is
same
In
different
demand
curve
Change in
other
factors
Doesn’t
follow law
of demand
47

48. Price of related goods
Consumer incomes
Consumer tastes and fashion
Technological progress
Change in size and composition of population
Change in distribution of income
Taxation policy
Change in real income
Expectation
48

49. ”in economics the
word supply always
means a schedule. A
schedule of possible
prices and of
amounts that would
be sold at each
price” Watson
and getz
“the amount of a
commodity that
firms are able and
willing to offer for
sale is called the
quantity supplied of
that commodity” r g
lipsey
“the supply of goods
is the quantity
offered for sale in a
given market at
given time at
various prices”
Thomas
49

50. Increase in
number of
firm
Decrease in
rate of tax
Decrease in
various cost
associate with
production
Use of new
technology
50

51. Decrease in
number of firm
Increase in rate
of tax
Increase in
various cost
associate with
production
51

52. ”the supply
curve of a
commodity
shows the price
of the commodity
and the quantity
that the supplier
is willing to
supply at each
time period”
r g
lipsey
52

53. 0
5
10
15
20
25
30
35
40
45
50
10 20 30 40
Series 1
0
02
53
Price
Quantity

54. It is the table
which show
relation
between price
and quantity
supplied
54

55. Price Quant
ity
suppl
y
10 15
20 25
30 35
40 45
55
Supply
schedule

56. F[p]=Q[s]
“other things
remaining the same,
increase in price
increases the supply
and vice-versa.”
56
Object Meaning
F[p] Factor of
production
Q[s] Quantity
supplied

57. 0
5
10
15
20
25
30
35
40
45
50
10 20 30 40
Series 1
0
02
57
Quantity
Price
Price Quan
tity
suppl
y
15 10
25 20
35 30
45 40

58. Auction sale Clearance
sale
Expectation
of sellers
Fear of
being out of
fashion
58

59. It is the condition
in which seller
need more
money for his
personal purpose
so he may not
follow this law
59

60. Sometimes seller decrease
price to sell more product
60

61. When seller
know fall in
price in future
they may
decrease price
at present time
to sell more
product
61

62. It is a curve which
show the relation
between price and
quantity supply by
individual in the
market
62

63. It is a curve which
show the relation
between price and
quantity supply by
sum of all the sellers
in the market
63

64. 0
5
10
15
20
25
30
35
40
45
10 20 30 40
price
0
02
.
Decreas
e in
supply Increase
in
supply
64

65. Price Quantity
10 10
20 20
65
Here with a increase in price increase in supply

66. Price Quantity
50 30
40 20
66
Here with a
decrease in
price decrease
in supply

67. 0
10
20
30
40
50
60
70
10 20 30 40
first
second
third
Increase
in supply
67
Decrease in
supply

68. Prices of other
commodities
Goal of firms
State of
technology
Effect of
taxation
Government
regulation
68

69. 0
10
20
30
40
50
60
10 20 30 40
demand
supply
0
69
Price
Quantity
E

70. From the figure we
know that demand and
supply intersect at a
point called equilibrium
point where quantity
demand is equal to
quantity supply
70

71. 71
The end
Thank you