This document discusses different types of demand including individual, market, total market, industry, and company demand. It also discusses factors that affect demand such as price, income, population, tastes, and preferences. The key concepts covered include the law of demand, elasticity of demand, demand functions, and measurement of price and income elasticity. Different types of elasticity are defined including elastic, inelastic, perfectly elastic, perfectly inelastic, and unit elastic demand.

1. Welcome
Indus Institute of
Technology & Management
PRESENTED DY : RAVI RANJAN RAJ
C.S.E (3rd year)

3. Factor
affecting
demand
Demand
Law of
demand
Elasticity
of
demand
Demand
function

4. The quantity of goods
or services desired by
an individual, backed
by the ability and
willingness to pay.

5. Individual and market demand
Total Market and Market Segment Demand
Industry Demand and Company Demand
Derived Demand and Direct Demand
Demand for Durable and Non-Durable goods
Short-Term and Long term Demand

6. Individual and market demand
It is based on an individual’s personal
taste, income and price of the
commodity.
It decides the market strategy for the
sales of any commodity, like It’s price
business policy and planning.

7. Total Market and Market Segment
Demand
The total market aggregates on the basis of
geographical areas, price sensitivities ,sub
product, product uses , distribution
channels, customer size, genders etc.
Market segment demand differs on the
basis of profit margins, seasonal pattern
and market compaction.

8. Industry Demand and Company
Demand
Industry demand refers to the total
demand for the product of a industry.
Company demand refers to the
demand for the particular company
which is a part of industry.

9. Derived Demand and Direct Demand
When the demand for an output is
associated with the demand for another
output, it is called derived demand.
When the demand for an output of
commodity is independent of the demand
for other product, it is called direct demand.

10. Demand for Durable and
Non-Durable goods
Durable goods are the goods which can
be used time and again for a
consideration period of time.
Ex- machinery
Non- Durable goods are the goods which
are used up in a single act of consumption.
It include all types of services food stuff,
raw material etc.
Note- Non-durable goods have more demand than durable goods.

11. Short-Term and Long-Term Demand
Short- term demand refers to the
demand for such goods as are demanded
over a short period.
Ex- C.R.T. T.V.
Long term demand refers to the demand
which exists over a long period.
Ex-books

13. Factors Affecting
Demand
Price of commodity
Level of Income
Size of Population
Composition of Population
Tastes and Preference of Consumers

15. Demand Function
Demand function explains the relationship
between the demand for a commodity and the
factors determining demand.
The equation shows that demand for commodity X(DX), is the
function of (f) Price of commodity X(PX); Price of related goods
(Pr); Income of consumer (Y), Taste of consumer (T);
Advertisement effect (A); and unknown variables (U).

17. Law of Demand
If the price of any
commodity rises, the
quantity demanded
of that commodity
falls.

19. Elasticity of Demand
The ratio of the change in the demand
of commodity to the change in it’s price.
Elasticity Of Demand = percentage change in quantity demanded
percentage change in determinant of demand

20. Types of Elasticity of
Demand
Elastic Demand
Inelastic Demand
Perfectly Elastic Demand
Perfectly Inelastic Demand
Unit Elasticity

21. Elastic Demand
Elasticity is greater than one when the %
change in quantity demanded is greater
than the % change in price.
Elasticity > 1; Elastic demand

22. Inelastic Demand
Elasticity is less than one when the %
change in the quantity demanded is less
than the % change in price.
Elasticity < 1; Inelastic demand

23. Perfectly Elastic Demand
Elasticity is infinite when the %
change in price is very less or zero.
Elasticity = ∞; Perfectly elastic demand

24. Perfectly Inelastic Demand
The changes in price do not affect the
quantity demand of commodity. So the
elasticity is zero
Elasticity = 0; Perfectly Inelastic demand

25. Unit Elasticity
Elasticity is one, or unit elasticity if the
percentage changes in quantity
demanded is equal to the percentage
change in price.
Elasticity = 1; Unitary Elastic demand

27. Measurement of Price
Elasticity
Price elasticity of demand is generally defined as
the responsiveness of demand for a commodity to
the changes in its price.

28. Where: - Q= Original Quantity Demanded.
P = Original Price
Q = Change in quantity demanded
P = change in price.

29. Income Elasticity of Demand
The income elasticity of demand may be defined
as the ratio of the % change in purchases of a
good to a % change in income.
Income Elasticity = % change in purchases
of a goods
% change in income

30. q= Change in quantity Purchased.
q= Initial quantity purchased.
Y = initial income.
Y= small change in income.