Demand and its Concept

Introduction:

• This presentation focuses on the important subject of demand.
• We will understand the meaning and necessities of demand.

What is Demand:

• In the market, the talk is about the price of goods.
• Why there is a price: the good is useful and available in limited quantity.
• Economic Goods: Useful and limited quantity items that have a price.
• Free Goods: Unlimited quantity items available for free.

Features of Demand:

• Ability and willingness are necessary for demand.
• Demand is only considered when there is both an ability to pay and a willingness to purchase.
• It is essential to have price and quantity for a specific time period.

Difference between Demand and Desire:

• Demand requires both desire along with ability and willingness.
• Desire is merely a wish until ability and willingness are included.

Types of Demand:

• Individual Demand: Demand of an individual consumer.
• Market Demand: Total demand of all consumers.
• Joint Demand: Combined demand for two or more goods.
• Composite Demand: Demand for multi-use goods.

Factors Affecting Demand:

• Price of Commodity: Direct relationship between price and demand.
• Income of Consumer: Demand for normal goods increases as income rises.
• Taste and Preference: Personal preference and advertising also affect demand.
• Price of Related Goods: Price of substitute and complementary goods.
• Consumer Expectation: Future expectations affect demand.
• Government Policy: Government policies can also affect demand.

Law of Demand:

• Inverse relationship between price and quantity demanded.
• Quantity demanded decreases as the price increases.

Demand Curve and Schedule:

• Demand Schedule: A table of quantities at various prices.
• Demand Curve: Graphical representation, downward sloping.

Exceptions to Demand:

• Giffen Goods: Some goods whose demand increases even when the price rises.
• Prestige Goods: Goods bought to show status.
• Emergency Situation: Price is not considered in emergencies.

Shifts and Movement in Demand:

• Movement along Curve: Only price change affects quantity.
• Shift in Demand: Other factors shift the entire demand curve.

Conclusion:

• Studying demand helps in understanding various economic perspectives.
• Read and understand the concept of demand considering all aspects.