BAL BHARATI PUBLIC SCHOOL,

PITAMPURA
CLASS-11, ECONOMICs
Ch- demand
 Lesson plan
Title of lesson: Demand
Class: 11
Subject Area: Microeconomics
Topics: Law of demand, reasons behind law of demand, movement along demand curve, shifts in demand
curve.

••
Learning outcomes: Each child will be able to:
State law of demand.

•• Explain the reasons behind law of demand.

Distinguish between movement along demand curve and shifts in demand curve.

• Draw the related diagrams.

Construct related demand schedules.

Aids used: Power point presentation, Google meet

Introduction Activity: The teacher will draw a chart on the screen related to price and demand of a pair of jeans
The teacher will then ask few students to write how many jeans he/she would buy if jeans were selling
for Rs 1500 each. Next , teacher announces that now the prices have dropped to Rs 1200 and so on and
how many jeans would they buy now. The individual demands can then be summed up and students
would be asked to graph the above prices and quantity demanded and find out the relationship between
price and demand. The teacher will explain the meaning of ceteris paribus in the statement of law of
demand.

Home Assignment: Given at the end of PPT 2

Law of demand
 Statement

The Law of Demand States that, other things being constant

(Ceteris Peribus), the demand for a good extends with a
decrease in price and contracts with an increase in price. In
other words, there is an inverse relationship between quantity
demanded of a commodity and its price.

The term other thing being constant implies that income of

the consumer, his taste and preferences and price of other
related goods remains constant.

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 Assumptions Of Law of Demand

1)Tastes and Preferences of the consumers remain constant

2) There is no change in the income of the consumer.
3) Prices of the related goods do not change.
4) Consumers do not expect any change in the price of the
commodity in near future.

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 DEMAND SCHEDULE

PRICE OF ORANGES QUANTITY DEMANDED

(IN RS) (IN UNITS)

10 2

8 5

6 8

5 10

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EXPLANATION
• The diagram shows that when the
price of say, orange, is Rs. 10 per
unit, 2 units are demanded.
• If the price falls to Rs.8, the
demand increases to 5 units.
• Similarly, when the price declines
to RS 5, the demand increases to
10 units.
• Thus, the demand curve shows
increase in demand of orange
when its price falls. This indicates
the inverse relation between price
and demand.
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Why More of a Good is Purchased When its Price
Falls? Or Why Does Demand Curve Slope
Downwards?

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 1) Law of Diminishing Marginal Utility:
According to this law, as consumption of a commodity
increases, the utility from each successive unit goes on
diminishing to a consumer. Accordingly, for every
additional unit to be purchased, the consumer is willing
to pay less and less price. Thus, more is purchase only
when price of the commodity falls.

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 2)INCOME EFFECT

Income effect refers to change in quantity

demanded when real income of the buyer
changes as a result of change in price of the
commodity. Change in the price of a
commodity causes change in real income of the
consumer. With a fall in price, real income
increases. Accordingly, demand for the
commodity expands.

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 3)SUBSTITUTION EFFECT

Substitution effect refers to substitution of

one commodity for the other when it
becomes relatively cheaper. Thus, when price
of commodity X falls, it becomes cheaper in
relation to commodity Y. Accordingly, X is
substituted for Y.

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 Place your screenshot here

4) Size of Consumer Group: When price of a commodity falls, it

attracts new buyers who now can afford to buy it.
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 Change in quantity
demanded
Change is quantity
demanded takes place
when there is change in the
prices, keeping other
EXPANSION IN DEMAND CONTRACTION IN DEMAND
factors constant. This is
called movement along the
demand curve. The demand
Due to expands with a decrease in
Due to decrease
increase in price and demand
in prices, other
prices. contracts with an increase
factors remain other factors in prices keeping all other
constant remain factors constant.
constant
Change in quantity demanded is shown with movement
along the demand curve
D
UPWARD
DOWNWARD MOVEMENT
B MOVEMENT ALONG THE
PM
ALONG THE DEMAND CURVE
R
I P
A DEMAND CURVE
C C WHEN PRICES
EK WHEN PRICES INCREASES FROM
DECREASES FROM OP OP to OM , the
to OK , the quantity quantity demanded
D demanded increases decreases from OQp
from OQp to OQk. to OQm.
O Movement along the
Q Qp Qk Movement along the
m demand curve from A demand curve from A
QUANTITY DEMANDED to C is called to B is called
expansion in demand contraction in
demand.
 Change in demand is shown
D’ with
D
D’ (shift in the demand curve)

P DECREASE IN
INCREASE IN DEMAND
R C DEMAND
P Is due to change in
I B A Is due to change in
other factors keeping
C other factors keeping
price constant. When
E price constant. When
demand increases
demand decreases
D’ from OQp to Oqk say
from OQp to OQm say
D due to increase in
D’ due to decrease in
income for normal
O Qk income for normal
Q Qp goods.
goods.
m
The arrow shown from
QUANTITY DEMANDED The arrow shown
A to C is increase in
from A to B is
demand.
decrease in demand.
 Substitute goods with diagram ( cases of change in demand or shift in dd
curve)
P D’
R
D If the price of say Pepsi goes up then demand
I D’ for coke will go down. This we understand with
C the help of the diagram.
E X-axis shows the quantity demanded for coke
C and y axis shows the price of coke. Keeping the
O B A
F price of coke constant, then increase in price of
Pepsi will increase the demand for coke from
C OQp to OQk. There is a shift in the demand
O D’ curve shown by arrow from A to C.
K D
D’ Because now coke is comparatively cheaper
E
O Q Qp Qk than Pepsi and since they are substitute goods
m therefore they can be used in place of each
QUANTITY OF COKE other with equal ease and satisfaction.
And vice the versa if price of Pepsi goes down.
COMPLEMENATRY GOODS WITH DIAGRAM ( CASES OF CHANGE IN DEMAND
OR SHIFT IN DD CURVE)

In this case ,we are taking the example of the goods

P like car and petrol. If the price of petrol increases
D’
R D then the demand for car many go down as the
I D’ demand for petrol is derived demand. Now if we
C look at the diagram, x – axis and y-axis shows
E quantity of car and price of car respectively.
B A C As the price of petrol increases ,demand for car
O decrease from OQp to OQm. There is a shift in the
F
demand curve from A to B. Keeping the price of
the car constant, a change in the price of its
C
A
complementary good may change the demand for
R the related good.
D’ D’
D
O Q Q Qk
m p
QUANTITY OF CAR
Q. Explain the difference between movement along the demand curve and shift of
demand curve using the diagram given below.
 Assignment
Q1 Show the following cases using diagram and explain in brief.
a. demand for desktop computers with increase in price of laptops demand for bread with
increase in its price.
b.demand for air conditioners with increase in income
c. demand for two wheelers with decrease in income.
d. increase in the tastes and preferences of the consumers towards more of Ayurveda
products.
e. demand for pen with increase in the price of refill.
Q2 Explain the difference between ( two points each)
a. Normal goods and inferior goods.
b. Substitute goods and complementary goods.
Q3 Explain the law of demand with the help of a demand schedule and demand curve.