HIMACHAL PRADESH NATIONAL LAW UNIVERSITY

DISCIPLINE - ECONOMICS

TOPIC - DEMAND

SUBMITTED TO: -

DR HARI CHAND

THAKUR SIR

SUBMITTED BY: -

YASHASVI SHARMA

BBA LLB (HONS.) (SEM 1ST)

ENROLLMENT NO.: - 1120202148

(i)
ACKNOWLEDGEMENT

I Yashasvi Sharma would like to precise my sincere feeling to Dr Hari Chand

Thakur Sir for his steering and support during this project and for giving me an

opportunity to work on the topic demand, his insight and valuable help has been

of immense help. I conjointly appreciate the given e-resources provided by

university, these resources were of great help and facilitated for analysis and

knowledge concerning the project. This project is a success simply because of the

help and efforts provided by them.

(ii)
INDEX

S.NO TOPIC

1 Introduction

• What Is Demand?
• Types Of Demand
• Demand And Quantity Demanded
2 Demand Schedule

• Individual demand schedule

• Market demand schedule

3 Theory Of Demand

4 What is demand curve?

• Individual demand curve

• Market demand curve
5 Determinants Of Demand

6 Movements along the demand curve

7 Conclusion

8 Bibliography

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 INTRODUCTION

What is Demand?

Demand is an economic principle bearing on a consumer's want to

get product and services and temperament to pay a worth for a
particular sensible or service. Holding all alternative factors constant,
a rise within the cost of a good or service can decrease the number
demanded, and contrariwise. Market demand is that the total amount
demanded across all customers in an exceedingly marketplace for a
given sensible. combination demand is that the total demand for all
product and services in an economy.

The demand arises out of the following:

i. Desire or want for the commodity.

ii. Capability to pay,

iii. Willingness to pay.

Demand refers to consumers' want to get product and services at

given costs. Demand, beside provide, determines the particular costs
of products and therefore the volume of products that changes hands
in an exceedingly market.in economic science, demand is formally
outlined as ‘effective’ demand which means that it's a client need or a
requirement supported by a capability to pay particularly a budget
derived from there disposable income. financial gain provides people

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with a buying power that they exercise in an exceedingly market
through effective demand.

Types of Demand

The various varieties of demands square measure generally mentioned

below:

Negative Demand – Negative demand could be a sort of demand that

is formed if the merchandise is disliked generally. The merchant has
got to solve the problem of no demand by analysing why the market
dislikes the merchandise so counter acting with the correct promoting
ways.

No demands – sure merchandise face the challenge of no demand. If

The promoting unit of the firm ought to specialise in promotional
campaigns and human action reasons for potential customers to use the
firm's services.

Declining demand – Declining demand is once demand for a product

is declining due to relating to it or because of the price

Irregular demand – These merchandises sell on an irregular basis and

sell a lot of throughout high season whereas their demand is extremely
low throughout non-seasons.

Full demand – It conjointly means the markets square measure pleased

with the merchandise of the corporate which folks wish to shop for
from an equivalent company.

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Demand and Quantity Demanded

Demand for a commodity is often expressed with relevancy to its price.

if you raise anybody what quantity of good -x an individual would
purchase, it'll invariably depend upon what the value is. At the next
price quantity demanded would be low, at a cheaper price quantity
demanded would be high, here comes the distinction between demand
and amount demanded. demand refers to completely different
attainable amount to be purchased at different attainable costs of that
trade goods. on the opposite hand quantity demanded refers to a
particular commodity to be purchased against a particular price of
the commodity.

Illustration demand for commodity-x refers to mention 10 units of X

if commissary (price of x) = Rs 5 per unit. 8 units of X if px= Rs 6 per
unit, 6 units of X if px=Rs 7 per unit so on. quantity demanded of trade
goods -X refers to mention eight units of X is commissary happens to
be Rs half-dozen per unit

What Is Demand Schedule?

In economics, a demand schedule may be a table that shows the

number demanded of a good or service at totally different value levels.
schedule may be graphed as a continual demand curve on a chart
wherever the coordinate axis represents value and therefore the
coordinate axis represents amount.

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A demand schedule most typically consists of 2 columns. the primary
column lists a value for a product in ascending or degressive order. The
second column lists the number of the merchandise desired or
demanded at that value. the value is set supported analysis of the
market.

When the info within the demand schedule is graphed to make the
demand curve, it provides a visible demonstration of the connection
between value and demand, permitting straightforward estimation of
the demand for a product or service at any purpose on the curve.

In straightforward language, we will say that once the value of a

good rises, people purchase less of that good. once the value falls,
people purchase additional of it. Economists believe powerfully
within the law of demand as a result of its therefore thinkable for people
who do not study economic science.

Individual Demand Schedule

Individual demand schedule refers to the demand schedule of an

individual buyer/consumer of a commodity in the market. it shows
quantities of a commodity which an individual buyer will buy at
different possible prices of that commodity table one is an individual
demand schedule. it shows different quantities of good x bought by
consumer at different prices of it

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Px (price of good) Qx (quantity demanded
(rupees) of good-X) (units)
Inverse relation
between price
1 4
and quantity
2 3 Px Qx
Px Qx
3 2

4 1

Market Demand Schedule

In market, there are various consumers of a commodity. market demand

schedule represents the demand for a commodity by all the consumers
in the market. it shows different quantities of a commodity which the
consumers intend to buy at different possible prices of that commodity,
then. on the assumption that there are only two consumers/ buyers in
the market, market demand schedule for good – x

PX (price of good X) QX (Consumer A) QX (Consumer B) QX (Consumer A

(units) (units) +Consumer B=Market
Demand) (units)
(1) (2)
(3)

1 4 5 4+5=9

2 3 4 3+4=7

3 2 3 2+3=5

(Assumption -there are only 2 consumer/buyer in the market)

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This table shows that when price of good-X rises, its market demand
falls. For example, when price was Rs 1 per unit, A’s demand = 4 units
and B’s demand = 5 units. Thus, the total market demand is 5+4=9
units, but when the price rises to Rs 2 per unit then market demand falls
to 7 units.

THEORY OF DEMAND

Theory of Demand tells the link between the value of products and its
amount demanded. If the value of any good or service will increase
then its demand decreases and the other way around. the higher you
perceive the law of demand, the higher you may perceive why you pay
completely different costs for various merchandise. wherever there's
demand there's a provider and generally suppliers will produce
demand. There are several factors that influence demand for
merchandise and services within the market place.

Theory of Demand: Definition

It defines relationship between the quantity of good shoppers can

purchase and therefore the value charged for that good. It states that
the amount demanded for a good rise because the value falls, all
alternative things staying a similar (no amendment within the
financial gain of the buyer, style of the buyer and value of alternative
goods). These are alternative things that may have an effect on
demand besides value.

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For example, if you actually like Apple product, you would possibly
not mind paying a better value for the new phone that simply came out.
If you get a replacement job and your financial gain goes up, you would
possibly not mind paying higher costs for sure merchandise as a result
of your new-found wealth.

Drawing a Demand Curve

Individual demand curve

The demand curve is drawn according to the demand schedule. The

demand schedule states precisely how many units of a good or service
will be purchased at various price points. For example, below is the
demand schedule for high-quality organic bread:

It is important to note that as the price decreases, the quantity

demanded increases. The relationship follows the law of demand.
Intuitively, if the price for a good or service is lower, there is a higher
demand for it.

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This is thecurve that can be drawn out of that schedule:

Through the demand curve, the relationship between price and quantity
demanded is clearly illustrated. As the price for notebooks decreases,
the demand for notebooks increases.

Determinants of Demand

Price of The Merchandise

People use price as a parameter to create choices if all different

factors stay constant or equal. in step with the law of demand, this
suggests a rise in demand follows a reduction in price and a decrease
in demand follows a rise within the worth of comparable product.

The demand curve and also the demand schedule facilitate verify the
demand amount at an index. Associate in Nursing elastic demand
implies a sturdy modification amount in the course of a modification in
worth. Similarly, Associate in Nursing inflexible demand implies that
volume doesn't modification abundant even once there's a modification
in worth.

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2] Income of The Customers

Rising incomes result in an increase within the variety of products

demanded by customers. Similarly, a come by income is in the course
of reduced consumption levels. This relation between income and
demand isn't parallel in nature. utility determines the proportion of
modification within the demand levels. The demand for product
conjointly depends upon incomes of the individuals. The bigger the
incomes of the individuals the bigger are going to be their demand
for product. In drawing a demand schedule or a demand curve for a
good we have a tendency to take incomes of the individuals as given
and constant. once as a result of the increase in incomes of the
individuals, the demand will increase, the total of the demand curve
shifts upward and the other way around.

For instance, throughout the look amount in Asian nation the incomes
of the individuals have greatly magnified due to the massive investment
expenditure on the event schemes by the govt. and therefore the non-
public sector. As a result of this increase in incomes, demand for food-
grains has greatly magnified that has resulted in rightward shift within
the demand curve for them.

Likewise, once due to drought during a year the agricultural production

greatly falls, incomes of the farmers decline. As a result of the decline
in incomes of the farmers, they demand less of textile and alternative
manufac-tured product.

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3] Costs of Related Product or Services

Complementary merchandise – a rise within the worth of 1 product can

cause a decrease within the amount demanded of a complementary
product. Example: Rise within the worth of bread can cut back the
demand for butter. This arises as a result of the merchandise are
complementary in nature. The demand for a good is additionally
plagued by the costs of alternative product, particularly those that
square measure associated with it as substitutes or enhances.

{when we have a tendency to draw a demand schedule or a demand

curve for a good, we take the costs of the connected product as
remaining constant. Therefore, once the costs of the connected product,
substitutes or enhances, modification the total demand curve would
modification its position; it'll shift upward or downward because the
case is also. once value of a substitute for a good fall, the demand for
that sensible can decline and once the worth of the substitute rises, the
demand for that sensible can increase.

For example, once value of the tea similarly because the incomes of the
individuals remains a similar however value of the occasional falls, the
shoppers would demand less of tea than before. Tea and occasional
square measure terribly shut substitutes, so once occasional becomes
cheaper, the shoppers substitute occasional for tea and as a result the
demand for tea declines.

The goods that square measure complementary with one another, the
modification within the value of any of them would have an effect on
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the demand of the opposite. for example, if value of the milk falls, the
demand for sugar would even be affected. once individuals would take
additional milk or would prepare additional khoya, burfi, arugulas with
milk; the demand for sugar also will increase. Likewise, once value of
cars falls, the demand for them can increase that successively can
increase the demand for gasoline Cars and gasoline square measure
complementary with one another.

4] Consumer Expectations

Expectations of the next financial gain or expecting a rise in costs of

products can result in a rise the amount demanded. Similarly,
expectations of a reduced financial gain or a lowering in costs of
products can decrease the amount demanded. If the expectations are
bullish in the future then demand will be less and if there are bearish
expectations then the demand will be more as in the future it seems
as a loss.

5] No of Buyers Within the Market

The number of patrons incorporates a major impact on the whole or

internet demand. because the variety will increase, the demand rises.
what is more, this is often true regardless of changes within the worth
of commodities. We have already explained that the market demand for
an honest is obtained by adding up the individual demands of the
current similarly as pro-spective shoppers or consumers of an honest at
numerous doable costs. The bigger the quantity of shoppers of an
honest, the bigger the market demand for it.
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Now, the question arises on what factors the quantity of shoppers of an
honest depends. If the shoppers substitute one sensible for one more,
then the quantity of shoppers of that sensible that has been substituted
by the opposite can decline and for the great that has been utilized in
its place, the quantity of shoppers can increase.

Besides, once the vendor of a good succeeds find out new markets for
his sensible and as a result the marketplace for his sensible expands the
quantity of shoppers of that good can increase. Another vital cause for
the rise within the range of shoppers is that the growth in population.
for example, in Asian nation the demand for several essential product,
particularly food-grains, has magnified due to the rise within the
popu-lation of the country and therefore the resultant increase within
the range of shoppers for them.

6. Tastes and Preferences of The Consumers:

An important issue that determines demand for an honest is that the

tastes and preferences of the shoppers for it. an honest that consumers’
tastes and preferences square measure bigger, its demand would be
giant and its demand curve can lie at the next level. People’s tastes and
preferences for numerous products typically modification and as a
result there's modification in demand for them. The changes in demand
for numerous products occur thanks to the changes in fashion and
conjointly thanks to the pressure of advertisements by the makers and
sellers of various prod-ucts. For example, some years back once Coke
plant was established in national capital demand for it absolutely was

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terribly little. however currently people’s style for Coke has undergone
a modification and become favour-able thereto due to giant ad and
message in deep trouble it.

The results of this can be that the demand for Coca-Cola has magnified
pretty much. In political economy we might say that the demand curve
For Coke has shifted upward. On the contrary once any sensible goes
out of fashion or people’s tastes and preferences now not stay
favourable thereto the demand for it decreases. In political economy we
are saying that the demand curve for these products can shift
downward.

Movements Along A Demand Curve and Shifts in Demand

Curve

movements on a demand curve discuss with moving "up or down"

the demand curve. After we move down the curve, it may be a
situation of extension of demand, buying more to decrease in own
price of the good. after we move up within the curve it's situation of
contraction of demand:

extension of demand – occurs when quantity demanded in response to

a fall in price of the good

contraction of demand- occurs when amount demanded decreases in

response to an increase in own price of the good

example a shopper might get additional t-shirts once his financial gain
rises, worth of the T-shirt remaining a similar. a shopper currently
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attracts his contemporary demand schedule showing higher variety of
t-shirts against every doable worth than before. consequently, his
demand curve shifts to the correct. likewise, once income of a shopper
decreases, he might arrange to get less variety of t-shirts against every
doable worth than before. so, his demand curve would shift to the left.
thus, because of the modification in factors demand curve might shift
to left to right.

Movement along the demand curve

A change in price causes a movement along the demand curve. It can
either be contraction (less demand) or expansion/extension. (more
demand)

Contraction in demand. An increase in price from $12 to $16 causes

a movement along the demand curve, and quantity demand falls from
80 to 60. We say this is a contraction in demand
Expansion in demand. A fall in price from $16 to $12 leads to an
expansion (increase) in demand. As price falls, there is a movement
along the demand curve and more is bought.

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A change in price doesn’t shift the demand curve – we merely move from one point of
the demand curve to another.

Shift in the Demand Curve

A shift within the demand curve happens once the total demand curve
moves to the proper or left. for instance, a rise in income would mean
individuals will afford to shop for a lot of widgets even at a similar
value.
The demand curve may shift to the proper for the subsequent reasons:

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• The sensible became a lot of well-liked (e.g., fashion changes or
thriving advertising campaign)
• The value of a substitute sensible accumulated.
• The value of a complement sensible cut.
• A rise in incomes
• Seasonal factors.
the next value may cause a movement on the demand curve, however
within the long, it may cause a shift as shoppers reply to the
persistently higher costs.
For example, if there's a rise within the value of gasoline, there would
be a movement on the demand curve, and a smaller amount would be
bought. However, there's seems to be solely a tiny low fall in demand
as a result of the demand for gasoline tends to be quite a value dead
However, in the long term, it may shift to left as well because people
stimulate to the higher price by looking for alternatives, for example,
they buy an electric car and so no longer need petrol.

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CONCLUSION

Demand is a significant term in the study of economics, it is of

immense help for individuals as well as markets as it confides
the demand for a commodity as desire of a commodity in the
market which is backed by sufficient purchasing power as well
as willingness to spend. Determinants of demand is useful for
determining the extent of it as it help the suppliers as well as
they know what the consumers want and what should be
produces. It also ensures that there is more in the market of
people’s choice and what they want. all the instruments that is
curve and slope of demand make us understand different
situation in the market and how to act accordingly. Thus, we
can say that demand makes an important part of it

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BIBLIOGRAPHY

1. Book by Hl Ahuja

2. www.grow.in

3. investopedia.com

4. Businessjargons.com

5. Keydifferences.com

6. Byjus.com

7. Microeconomics by Sandeep garg

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