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Economic_Demand_Notes

Class 11 notes economics Demand chapter

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manharbhagwatia
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14 views

Economic_Demand_Notes

Class 11 notes economics Demand chapter

Uploaded by

manharbhagwatia
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter Notes: Economic Demand

Economic Demand: Key Concepts

1. Definition of Demand:

- Demand refers to the quantity of a good or service that consumers are willing and able to

purchase at various prices during a given period.

2. Law of Demand:

- There is an inverse relationship between the price of a good and the quantity demanded, ceteris

paribus.

- When the price rises, demand decreases, and vice versa.

3. Determinants of Demand:

- Price of the good

- Income of consumers

- Prices of related goods (substitutes and complements)

- Consumer tastes and preferences

- Future expectations of prices and income

- Number of buyers in the market

4. Types of Demand:

- Individual Demand: Demand by a single consumer.

- Market Demand: Total demand by all consumers in the market.

5. Demand Schedule and Demand Curve:


- Demand Schedule: A table showing the quantity demanded at various prices.

- Demand Curve: A graphical representation of the demand schedule, typically downward-sloping.

6. Elasticity of Demand:

- Price Elasticity: Measures the responsiveness of quantity demanded to a change in price.

Formula: Percentage change in quantity demanded / Percentage change in price.

- Income Elasticity: Responsiveness of demand to changes in income.

- Cross Elasticity: Responsiveness of demand for one good to a change in the price of another

good.

7. Shifts in Demand vs. Movements Along the Demand Curve:

- Movement along the curve: Caused by a change in the price of the good itself.

- Shift of the curve: Caused by changes in other factors like income, preferences, etc.

8. Exceptions to the Law of Demand:

- Giffen Goods: Goods for which demand increases as price rises due to the income effect

outweighing the substitution effect.

- Veblen Goods: Luxury goods for which demand increases as price rises due to their status

symbol.

9. Importance of Demand Analysis:

- Helps in pricing decisions.

- Assists in production planning.

- Aids in understanding market trends.

10. Graphical Representations:

- Ensure diagrams are correctly labeled with axes representing price and quantity.
End of Notes.

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