Demand Analysis & Elasticity of Demand Commerce YouTube Lecture Handouts Part 1

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Demand Analysis & Elasticity of Demand Commerce

Concept of Demand

  • The demand for a commodity is the quantity of the commodity which the consumer is willing to buy at a certain price during any particular period of time.
  • In economics, demand means effective demand which means there should be desire to own the good, sufficient money to buy it and willingness to spend the Demand and Price money.
Illustration: Concept of Demand

Factors Affecting DEMAND & DEMAND Function

Illustration: Factors Affecting DEMAND & DEMAND Function

Law of Demand

The law of demand states that there is an inverse relationship between price and quantity bought of a commodity, ceteris paribus.

Illustration: Law of Demand

Slope of Demand Curve

The demand curve slopes downward because of:

  • Law of diminishing marginal utility (as given by Marshall) ,
  • Income effect,
  • Substitution effect, and
  • New consumers creating demand.
Illustration: Slope of Demand Curve

Demand Schedule & Demand Curve

Illustration: Demand Schedule & Demand Curve

Manishika