this is a conceptual slide relating to thoeory of demand concept in managerial economices or business economics

1. Presentation by
SSSatyagopal
15PGDM0012

2. Meaning of demand
Factors determining demand
Law of demand
Exceptions to law of demand
Income demand
Cross demand

3. “ Desire to buy backed up with ability to pay and
willingness to purchase creates demand ”
Definition :
Various quantities of goods and services that can be purchased
by people at different level of prices at particular period of
market desire to buy backed by ability to purchase and
willingness to pay is essential for existence of demand

4. Factors determining demand :
Price of Product
Consumer income
Tastes and habits of consumer
Price of other related products
Seasonal variations
Population & Technology
Future expectation about prices

5. Law of Demand/Price demand :
This expresses the relationship between price and quantity demanded for a
commodity. price demand refers to the various quantities of a commodity or service
that a consumer should purchase at a given time in market at various hypothetical
prices , and other things being remained constant (determinants of demand )
How law of demand can be measured ?
Individual Demand schedule
Market demand schedule

6. Individual Demand schedule :
An Individual demand schedule states the relationship between various quantities
purchased at various prices by a single consumer in market
0
2
4
6
8
10
1 2 3 4 5 6 7 8
Individual demand Curve
demand
Price of Mangoes Quantity demanded
9 1
8 2
7 3
6 4
5 5
4 6
3 7
2 8
“There exists a inverse relationship between price of good and quantity demanded”

7. Market Demand schedule :
A market demand schedule shows the total demand for a good at
particular point of time at different prices in the market
Price of mangoes QD of A QD of B QD of C Market Demand
10 6 6 10 22
14 8 10 15 33
8 10 14 20 44
7 12 18 25 55
6 14 22 30 66
5 16 26 35 77

8. Exceptions to Law of demand :
Geffen's paradox
Weblon goods (or) prestigious goods (or) Articles of distinction (or)
Cosprious goods
Future expectations (or) speculation
Inflation
Scarcity
Ignorance of consumer
0%
20%
40%
60%
80%
100%
d1 d2 d3 d4 d5
Exceptionaldemandcurve

9. Income demand :
This refers to the various quantities of goods and services which would be purchased by
consumer at various levels of income . If the income increases the demand for the
product also increases, being other things remained constant (determinants of demand)

10. Cross demand :
It refers to the different quantities of commodity that consumers purchase per unit of
income at different prices of a related commodity, “other things remain the same”
(determinants of demand). The related goods are either substitutes or complementary

11. Presentation by
SSSatyaGopal
15PGDM0012