deter min ante of demand

8/7/2019 Deter Min Ante of Demand

1/27

Determinants of Demand

Prepared by

Yash Vora PF 1029


2/27

MARKETS DEFINED

MARKETS

POTENTIAL

SELLERS

POTENTIAL

BUYERS


3/27

$5

4

3

2

1

DEMAND DEFINED

P QD10

20

35

55

80

A schedule or a curve that shows the

various amounts of a product that

consumers are willing and able to

purchase at each of a series of possible

prices.


4/27

LAWOF DEMAND

As Price Falls

Quantity DemandedR

ises As Price Rises

Quantity Demanded Falls

An inverse relationship exists

between price and quantity

demanded


5/27

GRAPHING DEMAND

P

Qo

$5

4

3

2

1

P QD

$5

4

3

2

1

10

20

35

55

80

Price of Corn

Quantity of Corn

CORNPlot the Points

10 20 30 40 50 60 70 80


6/27

55

P

Qo

$5

4

3

2

1

P QD

$5

4

3

2

1

10

20

35

55

80

Price of Corn

Quantity of Corn

CORNPlot the Points

10 20 30 40 50 60 70 80

GRAPHING DEMAND


7/27

35

P

Qo

$5

4

3

2

1

P QD

$5

4

3

2

1

10

20

35

55

80

Price of Corn

Quantity of Corn

CORNPlot the Points

10 20 30 40 50 60 70 80

GRAPHING DEMAND


8/27

P

Qo

$5

4

3

2

1

P QD

$5

4

3

2

1

10

20

35

55

80

Price of Corn

Quantity of Corn

CORNPlot the Points

10 20 30 40 50 60 70 80

GRAPHING DEMAND


9/27

P

Qo

$5

4

3

2

1

P QD

$5

4

3

2

1

10

20

35

55

80

Price of Corn

Quantity of Corn

CORNPlot the Points

10 20 30 40 50 60 70 80

GRAPHING DEMAND


10/27

P

Qo

$5

4

3

2

1

P QD

$5

4

3

2

1

10

20

35

55

80D

Price of Corn

Quantity of Corn

CORNConnect the Points

10 20 30 40 50 60 70 80

GRAPHING DEMAND


11/27

P

Qo

$5

4

3

2

1

P QD

$5

4

3

2

1

10

20

35

55

80D

Price of Corn

Quantity of Corn

CORN

10 20 30 40 50 60 70 80

What if

DemandIncreases?

GRAPHING DEMAND


12/27

P

Qo

$5

4

3

2

1

P QD

$5

4

3

2

1D

Price of Corn

Quantity of Corn

CORN

10 20 30 40 50 60 70 80

D

Increase

inDemand

Increase

in Quantity

Demanded10

20

35

55

80

30

40

60

80

+

GRAPHING DEMAND


13/27

P

Qo

$5

4

3

2

1

P QD

$5

4

3

2

1

10

20

35

55

80D

Price of Corn

Quantity of Corn

CORN

10 20 30 40 50 60 70 80

What if

DemandDecreases?

GRAPHING DEMAND


14/27

P

Qo

$5

4

3

2

1

P QD

$5

4

3

2

1

10

20

35

55

80D

Price of Corn

Quantity of Corn

CORN

10 20 30 40 50 60 70 80

--

10

20

40

60

D

Decrease

in

Demand

Decrease

in Quantity

Demanded

GRAPHING DEMAND


15/27

Change in Quantity DemandedQuantity Demanded versus

Change in DemandChange in Demand

Variables that

Affect Quantity Demanded A Change in This Variable . . .

Price Represents a movement alongthe demand curve

Income Shifts the demand curve

Prices of related goods Shifts the demand curve

Tastes (new products) Shifts the demand curve

Expectations Shifts the demand curve

Number of buyers Shifts the demand curve


16/27

Determinants ofIndividual

Demand for a Commodity Price

Price of Substitute

Price of complementary goods

Utility

Disposable Income

Taste, Preference Habits

Quality of the Commodity

Intensity of the want Future price expectation

Salesmanship & Advertising

Credit Facilities


17/27

Determinants ofMarket Demand

for a Commodity

Size of Population

Distribution of Income & Wealth

Standard of living of the people

Level of taxation

Social customs and festivals

Promotional Activities


18/27

Determinants of Demand

forN

ew Cars Consumer confidence

Relative price of second-hand vehicle

Relative costs of traveling on public transport

Cost fuel

Road charges / Tax

InterestRates

The price ofNew Cars Availability of Credits

Costs of car Insurance and servicing


19/27

Characteristics ofHousing

Durability

Heterogeneous

High Transaction cost

Long time delays

Investment good and a consumption good

Immobility


20/27

Main determinants of the

Demand for Housing

Demographic variable are

Population size and Population growth

It is necessary to consider

Family size,

The age composition of the family,

The number of first and second children,

Net migration (immigration minus emigration),

Non-family household formation,

The number of double family households, death rates,

Divorce rates and marriages.


21/27

Other Factors Affecting

Demand inH

ousing

Income

Price of housing

Cost and availability of credit

Consumer preferences

Investor preferences

Price of substitutes

Price of complements


22/27

Determinants of Demand for

T

ourismLife-Style Factors

Income & employment

Holidays

Education

Mobility

Life Cycle Factors

Domestice Age

House Hold Size

Race Gender


23/27

Other Determinants of

Tourism Demand

Level ofUrbanization

Economic Development

Political Factors

Technological Factors


24/27


25/27


26/27


27/27

Thank You

deter min ante of demand

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