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Here is SUJAL JAISWAL & JAYESH NAGAR from DEWAS (M.P).
"welcome to OUR first blog"
so let us start with our topic - "THEORY OF DEMAND " Class -11th MICROECONOMICS
WHAT DO YOU UNDERSTAND BY THE TERM DEMAND?
-> Demand for a commodity is simply the desire to buy a commodity backed with sufficient purchasing power of a commodity.
TYPES OF DEMAND ..
Demand is mainly of 2 types -
1. INDIVIDUAL DEMAND - demand of a single consumer.
2. MARKET DEMAND - demand of more than 1 consumer.
DETERMINANTS OF INDIVIDUAL DEMAND
(a) Price of the given commodity
(b) Prices of related goods
(c) Income of the consumer
(d) Tastes and preferences of the consumer
(e) Expectation of change in the price in future.
DETERMINANTS OF MARKET DEMAND
In addition to factors affecting individual demand market demand is also influenced by
(a) Size and composition of population
(b) Distribution of income
(c) Season and weather.
DEMAND SCHEDULE
Demand Schedule is a tabular presentation of various quantities of a commodity, that a consumer is willing to purchase at different prices, during a given period of time.
DEMAND CURVE -
The graphical representation of a demand schedule is known as DEMAND CURVE.
DEMAND FUNCTION -
Demand Function is a statement, which exhibits the relationship between quantity demanded for a particular commodity and factors influencing it.
Dx = f{Px,Py,Y,T,E}
LAW OF DEMAND -
Law of Demand states the inverse relationship between price and quantity demanded, keeping other factors constant (ceteris paribus).
REASON FOR LAW OF DEMAND:
(a) Law of Diminishing Marginal Utility
(b) Substitution Effect
(c) Income Effect
(d) Additional Customers
(e) Different Uses.
EXCEPTION OF LAW OF DEMAND:
(a) Giffen Goods
(b) Status Symbol Goods
(c) Fear of Shortage
(d) lgnorance
(e) Fashion-related goods
(f) Necessities of Life
(g) Change in Weather
CHANGE IN DEMAND CURVE -
1.MOVEMENT ALONG DEMAND CURVE
Movement along Demand Curve occurs, when the quantity demanded changes due to a change in the price, keeping other factors constant.
Contraction in Demand means a fall in the quantity demanded due to a rise in price, keeping other tactors constant.
2.SHIFT ALONG DEMAND CURVE
Shift in Demand Curve occurs, when the demand changes due to a change in the other factors, at the same price.
Increase in Demand refers to a rise in the demand for a commodity, due to a favorable change in the other factors, at the same price.
Decrease in Demand refers to a fall in the demand for a commodity, due to an unfavorable change in the other factors, at the same price.
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