Demand Annalysis

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DEMAND ANNALYSIS

BY GROUP-14

KRUPAL H.MEHTA-1111341

SUFI -1111343

RAGHAV-1111345

SHRUTI-1111331

TUSHAR-1111329



SUBJECT-MANAGERIAL ECONOMICS

FACULTY INCHARGE-V.K.XAVIER SIR



WHAT IS DEMAND?

Demand refers to the quantities of goods that

consumers are willing and able to purchase at

various prices during a given period of time.



ELEMENTS OF DEMAND

� DESIRE OF THE CONSUMER TO BUY A

COMMODITY

�

ABILITY TO PAY� WILLINGNESS OF CONSUMER TO PAY

The term demand is meaningful only when ithas reference to price, particular period and

place



DEFINITION OF DEMAND

Demand is defined as the quantity of a

commodity or service which consumers are

willing to buy at a price in a particular period



DETERMINANTS OF DEMAND

� PRICE OF PRODUCT (Px)

� INCOME OF CONSUMER (Y)

�

PRICE OF RELATED GOODS,SUBSTITUTES ORCOMPLIMENTS(Py)

� TASTE AND PREFERENCE OF THE CONSUMER(T)

� FASION AND HABBITS(F)

� WEATHER AND CLIMATE(W)

� CUSTOMS AND RELIGIOUS PRACTISE©



� ADVERTISEMENT(A)

� WAR AND EMERGENCIES(E)

� NUMBER OF CONSUMERS IN THE MARKET (P)� CONSUMERs EXPECTATION WITH REGARD TO

FUTURE MARKET PRICE

�INCOME DISTRIBUTION



DEMAND FUNCTION

� DEMAND FUNCTION EXPLAINS THAT DEMANDFOR A COMMODITY DEPENDS ON VARIOUSFACTORS.

� ALGREBRAICALLY DEMAND FUNCTION CAN BEEXPRESSED BY THE FOLLOWING EQUATION.

Dx f(Px , Y , Py, A , T . F , P..)

Where Dx is a demand for a particular product.



PRICE DEMAND FUNCTION

Price demand function explains the inverse

relationship b/w quantity demanded of a

goods and its price.



INCOME DEMAND FUNCTION

� Income demand function refers to various

quantities of a commodity or service that a

consumer buys at various levels of income,

assuming other factors(price of goods ,taste

and preference of the consumer)remain

constant.



CROSS DEMAND FUNCTION

Demand for a commodity is also influenced by

the change in the price of the related

commodity. It refers to the quantity of a

commodity that a consumer is ready to buy at

a given time due to change in the ;price of

related commodity assuming his income and

price of the commodity remains constant.



DEMAND CURVE

� Demand curve is the graph of demand

schedule. While drawing demand graph , price

is measured on Y-axis and quantity demanded

is measured on X-axis.



LAW OF DEMAND

Law of demand explains the inverse relationship

b/w price and quantity demand.

Prof. Marshall stated the law as other thingsremaining the same , quantity demanded of

the product vary inversely with its price. In

other words the demand of a commodity

rises when the prices fall and the demandcontracts when the prices rise.



ASSUMPTIONS OF LAW OF DEMAND

� CONSUMERs INCOME REMAIN CONSTATNT

� PRICE OF RELATED COMMODITIES REMAIN

CONSTANT� TASTE AND PREFERENCES REMAIN CONSTANT

� POPULATION REMAINS CONSTANT

�GOVT POLICY

� THERE IS NO CHANGE IN WEATHER

CONDITIONS



� THERE IS NO CHANGE IS ADVERTISEMENT

� FASHION DOES NOT CHANGE



EXPECTION OF LAW OF DEMAND

� GIFFENs PARADOX.



THANK YOU !!!!!!!!

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Demand Annalysis