MANAGERIAL ECONOMICSMANAGERIAL ECONOMICS

Buddha N. ShresthaBuddha N. Shrestha

(NCDB)(NCDB)

DEMANDDEMANDIn General,In General,

In Broad sense,In Broad sense,

• Effective desire for something( goods & services) at Effective desire for something( goods & services) at right time and fixed price – Demandright time and fixed price – Demand

Desire for something.Desire for something.

want to get…………… want to get……………

Demand =Demand =ff (desire + ability to pay + willingness to (desire + ability to pay + willingness to

pay)pay)

Demand refers to the quantities of commodity Demand refers to the quantities of commodity that consumers are willing and able to purchase at that consumers are willing and able to purchase at various prices during a given period of time.various prices during a given period of time.

Demand Contains:-

PricePrice

TimeTime

PlacePlace

Example:- In winter season, Ram want to buy 2 Example:- In winter season, Ram want to buy 2 jackets in 5000/- at Pune Centre.jackets in 5000/- at Pune Centre.

Determinants of DemandDeterminants of Demand Consumer IncomeConsumer Income PopulationPopulation Price of substitute goodsPrice of substitute goods Taste of consumerTaste of consumer Fashion Fashion SeasonSeason AdvertisementAdvertisement

Income Demand

Population

Price of substitute goods

Tastechange

Habitchange

Demand

Demand

Demandchange

Demandchange

Fashionchange

Demandchange

Seasonchange

EffectiveAdvertisement

Demandchange

Demand

DEMAND CURVEDEMAND CURVE

Demand Curve shows how much of a good Demand Curve shows how much of a good consumers are willing to buy at different prices. consumers are willing to buy at different prices. ( holding other things constant)( holding other things constant)

Demand curve shows the relationship between Demand curve shows the relationship between Price and Quantity of commodityPrice and Quantity of commodity.( holding other .( holding other things constant)things constant)

Law of Demand determines the Demand Curve.Law of Demand determines the Demand Curve.

LAW OF DEMANDLAW OF DEMAND

Law of Demand indicates the Inverse relationship Law of Demand indicates the Inverse relationship between Price and Quantity of commodity.between Price and Quantity of commodity.

Other things remaining the sameOther things remaining the same

“ “ Higher the Price Lower the Demand,Higher the Price Lower the Demand,Lower the Price Higher the Demand.”Lower the Price Higher the Demand.”

Example:-Example:- If there is high price of apple in the market If there is high price of apple in the market people does want to buy more apple, But there is low people does want to buy more apple, But there is low people want to buy more apple.people want to buy more apple.

In Table,In Table,

Price of apple (Rs.)Price of apple (Rs.) Demand of apple (k.g.)Demand of apple (k.g.)

5050 44

100100 33

150150 22

200200 11

Demand of Apple

In In Figure,Figure,

(Price(PriceOf Apple)Of Apple)

( Quantity of Apple )( Quantity of Apple )

5050

100100

150150

200200

11 22 33 44

XX

YY

DD

DD

Demand Demand CurveCurve

Nature of Demand CurveNature of Demand Curve

Downward SloppingDownward Slopping

Reason for downward slopping the Demand Curve:Reason for downward slopping the Demand Curve:

1.1. Income effectIncome effect

2.2. Substitution effectSubstitution effect

3.3. Nature of ConsumerNature of Consumer

4.4. Socio-Cultural effectSocio-Cultural effect

Thank youThank you