Law of demand deals with functional relationship between price and the commodity demanded.
Other things being the same, When the price increases the demand for the commodity decreases & when the price decreases the demand for the commodity increases.
Sunday, May 4, 2008
Demand Curve
Explanation to a generic demand diagram
This is made possible by Freeservers, not allowing me to remote-link the image :)
Point A shows how, more commodities are bought at lesser price and when the price increases at X axis, how the demand for the commodities decreases.
P S: Demand curve need not always be linear, but with relation to the market types.
Full page at: http://classe.8m.net/demand/curve.html
This is made possible by Freeservers, not allowing me to remote-link the image :)
Point A shows how, more commodities are bought at lesser price and when the price increases at X axis, how the demand for the commodities decreases.
P S: Demand curve need not always be linear, but with relation to the market types.
Full page at: http://classe.8m.net/demand/curve.html
Determinants of Demand
Determinants of demandDeterminants of demand are those, which actually determines the quantity of demand.Various determinants of demand are as follows:
Price of the commodities
Price of the competitive products
Income of the consumer
Taste of the consumer
Weather conditions
Price of the commodities
Price of the competitive products
Income of the consumer
Taste of the consumer
Weather conditions
Causes of Demand
Causes of demand are the things which stimulates a person and gives him an idea to buy some commodities.
In other words, causes of demands are those, which brings out a need to use a particular product.
Rain may be the cause of my demand for an umbrella.
Hot climate might be the cause of my demand for an air conditioner.
Causes of demand do have a significant role in economy, but not like determinants of demand.
This is because of the reason that, if one is not able to purchase a product, even efter realizing that the need of that will be caused by some element, he adapts to the new situation. He evolves to takein the new situation.
In other words, causes of demands are those, which brings out a need to use a particular product.
Rain may be the cause of my demand for an umbrella.
Hot climate might be the cause of my demand for an air conditioner.
Causes of demand do have a significant role in economy, but not like determinants of demand.
This is because of the reason that, if one is not able to purchase a product, even efter realizing that the need of that will be caused by some element, he adapts to the new situation. He evolves to takein the new situation.
Demand and Law of Demand
Demand is a word meaning a persons' desire and potency to purchase a commodity from the market.Here, we should differentiate demand from desire.. In the process, desire is an intermediate level. It may not end up in the final level, that is purchase. But Demand normally ends up in final stage, for then only, it is known thus.The point to be noted is that, desire is not the only cause of demand and the only intermediate level in the process of purhasing. There are other causes and steps also, which I will explain in the next chapter.
Definition:"Demand may be defined as the quantity of the commodity that a person is willing to take from the market, at a given price, at a given period of time."Effective demand is nothing but, the desire when supported by purchasing power is called so.
Explanation:From the above definition, we can understand that there are some primary natures as one may find in any forces.
These natures can be pointed out as follows:
Demand is always expressed with relation to unit of time
Demand is always expressed with relevance to price
Definition:"Demand may be defined as the quantity of the commodity that a person is willing to take from the market, at a given price, at a given period of time."Effective demand is nothing but, the desire when supported by purchasing power is called so.
Explanation:From the above definition, we can understand that there are some primary natures as one may find in any forces.
These natures can be pointed out as follows:
Demand is always expressed with relation to unit of time
Demand is always expressed with relevance to price
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