The Content in the Slide is Designed as per the Syllabus of Nepal Education Board (NEB) for Grade XI & XII.

1.  Meaning of Demand
 Demand Function
 Law of Demand
 Derivation of Individual Demand & Market Demand
 Moment Along the Demand Curve
 Shift In Demand Curve
~ Darshan K. C.
PART – A
Demand

2. Demand
 Demand refers to those Desire or Wants for which a Consumer is Able &
Willing to Pay for particular goods & services at possible Price during a
certain Period of Time.
 For E.g. If an unemployed person wants to buy a Motorcycle it is mere just
a desire or want but not a demand because he do not have ability to pay
for it. But if the Person is employed and want to buy a Motorcycle than it
can be said as demand because in this case he is willing as well as able or
will be able enough to purchase it.
 In short following elements are essential for Demand:
 Desire or Wants to get something
 Ability to Pay
 Willingness to Pay
 Possible Price Period of Time
Meaning of Demand

3. Demand Function
 The functional relationship between Quantity Demand of goods & services and its
Determinants is known as Demand Function.
i.e.
Qdx = f(Px, Y, PY, T, A, P, C,E,……)
Where,
Qdx = Quantity Demanded of Goods & Services
f = Function
Px = Price of Goods & Services
Y = Income of a Consumer
PY = Price of related Goods & Services
T = Taste of Consumer
A = Advertisement
P = Size of Population
C = Climate
E = Expected Price
Determinants of Demand*
Demand

4. Demand Function
Where,
Qdx = Quantity Demanded of Goods & Services
f = Function
Px = Price of Goods & Services
Y = Income of a Consumer
PY = Price of related Goods & Services
T = Taste of Consumer
A = Advertisement
P = Size of Population
C = Climate
E = Expected Price
Determinants of Demand
*. The Factors or Elements that brings change in Demand for goods and Services is known as Determinants of Demand.
The changes can be both direct or inverse.
Demand

5.  Developed by Neo Classical Economist Alfred Marshall.
 Law of Demand explains the functional relationship between Price (Px) & Quantity
Demanded (Qdx) of Goods & Services other thing remaining the same.
 It explains there is always Inverse relationship between Price (Px) & Quantity Demanded
(Qdx) of Goods & Services.
 In short Law of Demand refers to – Higher the Price, Lower will be Quantity Demanded and
Lower the Price, Higher will be Quantity Demanded.
Px
Px
Qdx
Qdx
Law of Demand
if,
Px = Price of Goods & Services
Qdx = Quantity Demanded of Goods and Services
i.e.
Demand

6. Law of Demand
Demand Schedule or Table
Price of Goods (Rs.) Quantity Demanded of Goods (Kg.)
1 50
2 40
3 30
4 20
5 10
 The schedule or table that represents various quantity demanded of goods and services at
different price level during a period of time is known as Demand Schedule.
Demand

7. Law of Demand
 The graphical representation of demand schedule that shows inverse relationship
between price and quantity demanded of goods & services is known as Demand Curve.
Demand Curve always slopes downward.
0
1
2
3
4
5
6
0 10 20 30 40 50 60
Price(Px)
Quantity Demanded (Qdx)
Demand Curve
Demand

8. Derivation of Individual Demand & Market Demand
 Individual Demand: Individual demand refers to the demand of Single or Individual Consumer.
Demand

9. Derivation of Individual Demand & Market Demand
 Market Demand: The sum or combination of various Individual Demand for a particular goods
& services is know as Market Demand.
Demand
Price
(Px)
Quantity
Demand of
Consumer A
(QdA)
Quantity
Demand of
Consumer B
(QdB)
Market Demand
(Qdx = QdA +
QdB)
1 50 25 75
2 40 20 60
3 30 15 45
4 20 10 30
5 10 5 15 0
1
2
3
4
5
6
0 10 20 30 40 50 60 70 80
Price(Px)
Quantity Demanded (Qdx)
QdA
QdB
Qdx (QdA + QdB)

10. Moment Along the Demand Curve
 Movement Along the Demand Curve: When Demand Curve for Goods & Services changes with
the change in Price Factor only, it is known as Movement along the Demand Curve. Here no
new demand curve is formed therefore it is also known as change in quantity demanded for
goods and services.
Demand
Movement Along the Demand Curve
1. Extension in Demand 2. Contraction in Demand

11. Moment Along the Demand Curve
1. Extension in Demand : When Quantity Demanded for Goods & Services increases with decrease in Price, it
is known as Extension in Demand. It is also known as Increase in Quantity Demanded.
Demand
Price of Goods
(Rs.)
Quantity Demanded for
Goods & Services (Kg.)
4 20
2 40
0
1
2
3
4
5
0 20 40 60
Price(Px)
Quantity Demanded (Qdx)
Extension in Demand
Extension in
Demand

12. Moment Along the Demand Curve
2. Contraction in Demand : When Quantity Demanded for Goods & Services decreases with increase in
Price, it is known as Extension in Demand. It is also known as Decrease in Quantity Demanded.
Demand
Price of Goods
(Rs.)
Quantity Demanded for
Goods & Services (Kg.)
2 40
4 20
0
1
2
3
4
5
0 20 40 60
Price(Px)
Quantity Demanded (Qdx)
Contraction in Demand
Contraction in
Demand

13. Shift In Demand CurveDemand
 Shift In Demand Curve : When Demand Curve for Goods & Services changes with the change
in Other Factor like: Income, Taste etc. except Price, it is known as Shift in Demand Curve. Here
new new demand curve is formed therefore it is also known as change in demand.
Shift in Demand Curve
1. Rightward Shift In
Demand
2. Leftward Shift in
Demand

14. Shift In Demand Curve
1. Rightward Shift In Demand Curve : When Quantity Demanded for Goods & Services increases with
favorable changes in other factors except price, it is known as Rightward Shift in Demand Curve. It is also
known as Increase in Demand.
Demand
Price of
Goods
(Rs.)
Quantity
Demanded for
Goods & Services
(Kg.)
Consumer’s
Income
(Y)
3 20 1oo
3 40 200
3 60 300
0
1
2
3
4
0 20 40 60 80
Price(Px)
Quantity Demanded (Qdx)
Rightward Shift In Demand
Rightward Shift In
Demand
D1
D2 D3

15. Shift In Demand Curve
2. Leftward Shift In Demand Curve : When Quantity Demanded for Goods & Services decreases with
unfavorable changes in other factors except price, it is known as Leftward Shift in Demand Curve. It is also
known as decrease in Demand.
Demand
Price of
Goods
(Rs.)
Quantity
Demanded for
Goods & Services
(Kg.)
Consumer’s
Income
(Y)
3 60 3oo
3 40 200
3 20 100
0
1
2
3
4
0 20 40 60 80
Price(Px)
Quantity Demanded (Qdx)
Leftward Shift In Demand
Leftward Shift In
DemandD3
D2 D1