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DEMAND ANALYSISMMS-I DIV-D

Atul Alandkar 182Dinesh Baldi 185Manish Jarani 202Ambar Kadam 204Tejas Kshemkalayani 207

Rahul Nagare 217Pradeep Kumar 226Rakesh Rajdev 227Kishor Tiwari 235Pooja Turrey 236

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LAW OF DEMAND

The law of demand is an economic law that states that consumers buy more of a good when its price decreases and less when its price increases with other things the same.

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Law of demand

It states that other things constant, when the price of a commodity rises, the demand for that commodity falls and when the price of a commodity falls,the demand for that commodity rises.

In other words

“Demand for a product is inversely proportional to its price.”

LAW OF DEMAND

Price ( in Rs) Quantity Demanded(in numbers)

5 20

10 10

20 5

25 4

50 2

4

5

*LAW OF DEMAND

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LAW OF DEMAND

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Law of supply

What Does Law Of Supply Mean?

When other factors being equal, as the price of a good or service increases, the quantity of goods or services offered by suppliers increases and vice versa.

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LAW OF SUPPLY

The law of supply states that other things remaining the same,the higher the price of a commodity the greater is the quantity supplied.

Price of the product revenue to the supplier.

Therefore higher price means greater revenue to the supplier and hence greater is the incentive to supply.

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LAW OF SUPPLY

The law of supply states that other things remaining the same,the higher the price of a commodity,the greater is the quantity supplied.

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*SUPPLY SCHEDULE

PRICE( Rs. Per cup) SUPPLY(“000 cups per month)

15 10

20 15

25 30

30 45

35 60

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LAW OF SUPPLY

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LAW OF SUPPLY

The law of supply states that other things remaining the same,the higher the price of a commodity the greater is the quantity supplied.

Price of the product revenue to the supplier.

Therefore higher price means greater revenue to the supplier and hence greater is the incentive to supply.

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ELASTICITY OF DEMAND

The concept of elasticity of demand is generally associated with the name of Alfred Marshall.

1.The law of demand is a qualitative statement of the relationship between the price of a commodity and its quantity demanded by the consumers.

2.The law of demand does not specify any quantitative relationship between the two

magnitudes i.e., between price and the quantity demanded. In economics we say that the demand for certain commodities

are more elastic than the demands for other goods.

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ELASTICITY OF DEMAND definition :

“Elasticity of demand is, therefore a technical term used by the economist to describe the degree of responsiveness of the demand for a commodity to fall in its prices”

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TYPES OF ELASTICITY OF DEMAND

There are three types of elasticity of demand

1.Price Elasticity of demand

2.Income elasticity of demand

3.Cross Elasticity of demand

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TYPES OF ELASTICITY OF DEMAND

1 .Price Elasticity of Demand:

It is the ratio of percentage change in the quantity demanded of a commodity to a given percentage change in its price.

Percentage change in qty demanded

Price elasticity of demand = ……………………………………………………………..

Percentage change in price

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INCOME ELASTICITY OF DEMAND

*The Income Elasticity of Demand measures the rate of response of quantity demand due to a raise (or lowering) in a consumers income. The formula for the Income Elasticity of Demand (IEoD) is given by:

*IEoD = (% Change in Quantity Demanded)/(% Change in Income)

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Cross Elasticity of Demand

A cross elasticity is the effect on the change in demand or supply of one good as a result of a change in something related to another product.

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