Individual and market demand function

1. INDIVIDUAL & MARKET
DEMAND FUNCTION
PRESENTED BY
JACKSON DSOUZA
1ST YEAR MCOM
SRI POORNAPRAJNA EVENING COLLEGE UDUPI
UNIT-2

2. WHAT IS DEMAND?
Demand comprises of three things:
Ø Desire of commodity
Ø Sufficient money to purchase the
commodity and
Ø Willingness to spend money to purchase that
commodity.
It is clear that a want or a desire does not become a demand unless
an individual has ability to purchase and willingness to satisfy it.

3. • Demand function shows the relationship between quantity
demanded for a particular commodity and the factors
influencing it
DEMAND FUNCTION
•It can be either with respect to one consumer or to all the
consumers in the market .

4. Individual demand function
Individual demand function refers to the functional relationship
between individual demand and the factors affecting individual
demand.
It is expressed as: D = f(Px,Pr ‚Y, T ,F)
Where,
D = Market demand of commodity x;
Px = Price of the given commodity x;
Pr = Prices of related goods;
T = Tastes and preferences;
Y = Income of the consumer;
F = Expectation of change in price in future.

5. Price
(in ₹)
Quantity demanded
of commodity x (in
units)
5 1
4 2
3 3
2 4
1 5
Individual demand schedule refers to a
tabular statement showing Various
quantities of a commodity that a
consumer is willing to buy at various
levels of price, during a given period of
time.
Individual demand schedule

6. Market Demand Function
Market demand function refers to the functional relationship
between market demand and the factors affecting market
demand.
It can be expressed as : Dx= f(Px Pr Y, T ,F, Po ,S, D)
Dx = Market demand of commodity x;
Px = Price of the given commodity x;
Pr = Prices of related goods;
T = Tastes and preferences;
Y = Income of the consumer;
F = Expectation of change in price in future.
Po =Size and composition
S = Season and weather;
D = Distribution of income.

7. Market demand schedule refers to a tabular statement showing various quantities of
a commodity that all the consumers are willing to buy at various levels of price,
during a given period of time.
Market demand schedule
Price (in ₹) Household A (D1) Household B (D2) Market Demand (in
units) [D1+D2]
5 1 2 1+2= 3
4 2 3 5
3 3 4 7
2 4 5 9
1 5 6 11

8. we can say that individual demand for the
commodity is not the same as market demand.
Further, individual demand is not influenced by
all the factors affecting market demand.
CONCLUSION

9. THANK YOU