Saturday, July 28, 2018

An example related to Demand Schedule and Demand Curve

         
   
         Price of                           Quantity of
         Darjeeling Tea              Darjeeling Tea               
                (Rs)                                 (Kg)
             
               250                                      1
               200                                      2
               150                                      3       
               100                                      4
                 50                                      5

In the below figure, the horizontal axis represents quantity and the vertical Axis represents price of a commodity.Considering the demand for tea the law of demand can be shown to a demand schedule and a demand curve. The graphical presentation has done below, where we will see the demand schedule when the price of of a good rises up  simultaneously the demand of that good will fall down. Suppose when the price of commodity is Rs 250 per kg, consumer purchase 1 kg of Darjeeling tea.So, when the price for Darjeeling tea falls to Rs 200 per kg, consumer purchased 2 kg of Darjeeling tea.As the price of a commodity are falling, quantity demanded goes on rising. Now when the price of the Darjeeling tea goes to Rs 50 per kg then the consumer purchase 5kg of Darjeeling tea.
       Now, this demand schedule presented into the demand curve by graphically plotting where as X-axis represents to quantity demanded and Y-axis represents to price (kg) of the commodity. By plotting 2 kg of Darjeeling tea at a price of Rs 250, we get A point, similarly by plotting 2 kg of Darjeeling tea at a price of Rs 200 we get point B and as on we will get C,D and E that are plotted in the graph, representing the other combination of price and quantity demanded. By joining A,B,C,D and E we will get a curve DD which is known as demand curve.

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