deman, desire, types of demand, determinants of demand, law of demand, law of supply, market...
TRANSCRIPT
Presented by:Anup Neupane.
Koshish Sen.Anish Maharjan.
Sarashwoti Gharti Magar.Pratigya Kafle.
1. Demand.2. Desire.3. Types of demand.4. Determinant of demand.5. Law of demand. 6. Law of supply.7. Interarction between demand and
supply.
Topics
Demand Amount of a commodity or
services which an individual buyer is willing and able to purchase at a given price during a certain period of time.
A desires which is backed up by willingness and ability to pay.
Mathematically: Qd=f(P, Pa, Pb ,T, Y,
Sp……..etc)
DesireDesire is a wish to have something.
Resource is not essential to have desire.
Desire has no limitation.
For example: a beggar might have desire to visit USA.
Types of demand1. Price of demand.2. Income demand.3. Cross demand.4. Joint demand.5. Composite demand.
Other thing remaining same, price demand refers various quantities of a commodity which a consumer would demand at various level of prices of the commodity.
It shows the inverse relationship between price and quantity demanded.
Mathematically, DX=f(PX)
Price demand.
PRICE OF COMMODITY QUANTITY DEMANDED OF COMMODITY
5 3010 2015 10
4 6 8 10 12 14 160
10203040
Price demand
Quantity
Pric
e
Income demand• Income demand shows the relationship between
consumer’s income and quantity demanded for a commodity. It include various quantities of the commodity which are bought at various levels of income, other things remaining the same.
• In the case of the normal goods, it shows positive relation between price and quantity demanded
• In the case of inferior goods, it shows negative relationship between income and quantity demanded.
5 10 15 20 25 30 350
100
200
300
400Normal goods
Pric
e
5 10 15 20 25 30 350
100
200
300
400Inferior goods
Pric
e
Income of consumer Quantity demanded for normal goods
Quantity demanded for inferior goods
100 10 30
200 20 20
300 30 10
5 10 15 20 25 30 350
100
200
300
400Normal goods
Pric
e
Cross demando Cross demand shows the relationship between
price of commodity and quantity demand of its related commodity, other things remaining same.
o In the case of substitute goods, it shows the positive relationship between price of commodity and quantity of its substitute goods.
o In the case of complementary goods, it shows the inverse relationship between price of commodity and quantity of its complementary goods.
5 10 15 20 25 30 350
100
200
300
400Substitutes goods
Pric
e
5 10 15 20 25 30 350
100
200
300
400Complementary
goods
Pric
e
Price Quantity demanded for substitutes goods
Quantity demanded for complementary goods
100 10 30
200 20 20
300 30 10
Joint demand. If different commodities are demanded for a single purpose it
is called joint demand. The demand for complementary goods is joint demand
because complementary goods and demanded jointly to satisfy a want.
Composite demand.o In our daily life some good are used for multiple purposes.o Demand for such goods is known as composite demand.
Price of the commodity
Income of the
consumer
Price of related goods
Taste, habit and preference
Season
Occasional events
Population
Advertisement and other
information
Future expectation
Determinants of demand
Law of demand It was propounded by Alfred Marshall.
It shows the relationship between price of commodity and quantity demanded for the commodity by a consumer, other things remaining constant.
It shows the inverse relationship between price and quantity demanded for the commodity.
mathematically , law of demand can be expressed as:
DX =f(PX)
ASSUMPTIONS Income of the consumer should remain
constant. Consumer taste and preference should
remain commodity. Size of the population should remain
constant. Prices of related goods should remain
constant. No expectation of future changes in the
price of the commodity.
5 10 15 20 25 30 350
10
20
30
40Demand curve
Quantity
Pric
e
Price Quantities Demand
10 30
20 20
30 10
Law of supply It shows the relationship between price and quantity supplied,
other things remaining the same.
There is direct and positive relationship between price and quantity supplied.
Mathematically, law of supplied ca be expressed as follows: SX=f(PX)
Assumptions No change in price of input or factors of
productions. No change in state of technology. No change in goal of producers. No change in number of producers. No change in price of other goods. No change in tax and subsidy policy of the
government.
4 6 8 10 12 14 160
2
4
6
8 Supply curve
Supplied
Pric
e
Price Quantity supplied
2 5
4 10
6 15
Interaction between Demand and Supply (Market Equilibrium) Ricardo and his followers believed that supply slide side
determines the price of product.
But Marshall said that demand and supply determine the equilibrium price and output of the economy.
Equilibrium price is the price at which quantity demanded and supplied are equal.
Price (Rs.)
Quantity Demanded
Quantity Supplied
Pressure On Price
5 16 2
10 11 5
15 9 9 Equilibrium
20 5 11
25 2 16
Thanks!Any questions ?