Demand

In: Business and Management

Submitted By ajeesh21
Words 4978
Pages 20
DEMAND

Two important forces of market are Demand & Supply

Demand Can be defined as the desire for a good for whose fulfillment, a person has sufficient resources & willingness to buy the good.

Desire – without money income, is a mere desire

Potential demand - Desire with resources but without willingness to spend

Effective demand - Desire accompanied by ability & willingness to pay

Individual Demand –

Quantity of a commodity that a person is willing buy at a given price over a specified period of time, say per day, per week, per month etc.
Market Demand
Total quantity that all the users of a commodity are prepared to buy at a given price over a specified period of time.
Market demand is the sum of individual demand
Law of Demand

All other things remaining constant, the quantity demanded of a commodity increases when its price decreases & decreases when its price increases
Other things - Consumer’s income - Price of related goods - Consumer’s taste & preferences - Advertisement

Demand Curve
Graphical representation of Law of demand. Demand curve concentrates on the price – quantity relationship Q = f(P)
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