Demand refers to the quantity of a commodity that consumer are willing and able to purchase at each possible price during a given period of time.
To complete demand:
Desire+ Capacity to pay + Willingness to pay
Demand vs. Quantity Demanded
Demand is the amount of a product that people are willing and able to purchase at each possible price during a given period of time.
The quantity demand is the amount of a product that people are willing and able to purchase at one, specific price.
The Law of Demand
Law of demand there is an inverse relationship between price and quantity demanded.
Quantity demanded rises as price falls, other things constant.
Quantity demanded falls as prices rise, other things constant.
Other things- Income of Consumer, Price of related commodity, Taste and Preferences etc.
The Demand Curve
The demand curve is the graphic representation of the law of demand.
The demand curve slopes downward and to the right.
As the price goes up, the quantity demanded goes down.
Determinants of Demand
Price of Commodity
Number of buyers
Income
Tastes
Prices of related goods
Expectations
Shift Factors of Demand
Shift factors of demand are factors that cause shifts in the demand curve:
Society's income.
The prices of other goods.
Tastes.
Expectations.
Number of Buyers
Taxes on subsidies to consumers.
Individual and Market Demand Curves
A market demand curve is the horizontal sum of all individual demand curves.
This is determined by adding the individual demand curves of all the demanders.
Sellers estimate total market demand for their product which becomes smooth and downward sloping curve.
Changes in Demand and Quantity Demanded
Change in Quantity Demanded same demand curve in response - movement along the to a price change.
Change in Demand shift in entire demand curve in - response to a change in a determinant of demand (a ceteris paribus variable)
The Concept of Elasticity
Elasticity is a measure of the responsiveness of one variable to another.
The greater the elasticity, the greater the responsiveness.