Demand and law of demand:
what is demand?
Demand is defined as want or willigness of consumers to buy goods and services.In economics willigness to buy goods and services depend on the ability to buy and it also called as effective demand.
Types of demand
Composite demand: It is when a good is demanded for two or more uses.For example oil can be used to run a car or may be in the factory machines.
Joint demand: It is when a demand for good increases the demand for another good also increases.For example mouse is bought with a mouse pad
Dervied demand :It is when demand for one good occurs as a result of it demand for another.For example if goods are made more labour is requried.Hence demand for labour is dervied demand.
Law of Demand:It says that when price increases the quantity demanded falls,when price decreases quantity demanded rises.Law of demand can be described with a curve called demand curve.
The law of demand states that other factors being constant price and quantity demand of any good and service are inversely related to each other .when a price of good increases the demand for a product will fall and vice versa.
The law explains the consumer behaviour when prices changes .In the market,assuming that all other factors affecting demand are constant ."when the price of a good rises it leads to a fall in the demand of that good".This is the natural consumer choice behaviour. This happens because of a consumer hestitaes to spend more for the good with the fear of going out of cash.
D:Q=f(P,T,Ps,Pc,Ec,A)
where f=functional relationship,P=price,T=taste,Ps=price of substitues,Pc=price of complementary goods,Ec=Expectations of customers,A=advertising.
Types of demand
Composite demand: It is when a good is demanded for two or more uses.For example oil can be used to run a car or may be in the factory machines.
Joint demand: It is when a demand for good increases the demand for another good also increases.For example mouse is bought with a mouse pad
Dervied demand :It is when demand for one good occurs as a result of it demand for another.For example if goods are made more labour is requried.Hence demand for labour is dervied demand.
Law of Demand:It says that when price increases the quantity demanded falls,when price decreases quantity demanded rises.Law of demand can be described with a curve called demand curve.
The law of demand states that other factors being constant price and quantity demand of any good and service are inversely related to each other .when a price of good increases the demand for a product will fall and vice versa.
The law explains the consumer behaviour when prices changes .In the market,assuming that all other factors affecting demand are constant ."when the price of a good rises it leads to a fall in the demand of that good".This is the natural consumer choice behaviour. This happens because of a consumer hestitaes to spend more for the good with the fear of going out of cash.
The law of demand states that other factors being constant price and quantity demand of any good and service are inversely related to each other .when a price of good increases the demand for a product will fall and vice versa.
The law explains the consumer behaviour when prices changes .In the market,assuming that all other factors affecting demand are constant ."when the price of a good rises it leads to a fall in the demand of that good".This is the natural consumer choice behaviour. This happens because of a consumer hestitaes to spend more for the good with the fear of going out of cash.
D:Q=f(P,T,Ps,Pc,Ec,A)
where f=functional relationship,P=price,T=taste,Ps=price of substitues,Pc=price of complementary goods,Ec=Expectations of customers,A=advertising.
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