Economics basic demand and supply in2025

economics

1. Lec 2: Demand
Dr. Rana Eid Selmy

2. Demand
•Demand is created by the needs of
consumers.
•Demand refers to how much
(quantity) of a product or
service is desired by buyers.

3. •The definition of demand highlights
three essential elements of demand:
•(i) price of the commodity
•(ii) quantity of the commodity
•(iii) period of time: the time period may be
a day, a week, a month, a year or any
other period

4. Demand Curve

5. •change in price will cause a movement along the
curve. When the price increases, the quantity
demanded will reduce.
•Demand for what are known as ‘Giffen goods’
actually rises with an increase in the price for
such goods.
•For example, when the price of rice increases in
Egypt, more rice will be purchased, as there is
not enough income left over to some consumers
to purchase higher value food items.

6. The movement implies that the
demand relationship remains
consistent. Therefore, a movement
along the demand curve will occur
when the price of the good changes
and the quantity demanded changes
in accordance to the original demand
relationship. In other words, a
movement occurs when a change in
the quantity demanded is caused only
by a change in price, and vice versa.

7. •A shift in a demand or supply curve occurs when a
good's quantity demanded or supplied changes even
though price remains the same.
•Shifts in the demand curve imply that the original
demand relationship has changed, meaning that quantity
demand is affected by a factor other than price.

9. Factor affecting demand
1. Prices of Goods
2.Income of Consumer
3.Prices of Related Goods
4.Population
5.Tastes,Habit
6.Expectation about future prices
7.Climatic Factors
8.Demonstration Effect
9.Distribution of national income

10. ELASTICITY OF DEMAND
•The elasticity of demand, or demand
elasticity, measures how demand
responds to a change in price or income.
•It is commonly referred to as price
elasticity of demand because the price of a
good or service is the most common
economic factor used to measure it.

11. •An elastic good is defined as one where
a change in price leads to a significant
shift in demand and where substitutes are
available for an item, the more elastic the
good will be.
• يف
;ريبك لوحت ىلإ رعسلا يف رييغتلا اهيف يدؤي يتلا ةعلسلا
ةعلسلا تناك املك ، ام رصنعل لئادب رفوتت ثيحو بلطلا
.ةنورم رثكأ

12. •The price elasticity of demand is
calculated by dividing the percentage
change in
 
quantity demanded 
by the
percentage change in price.

13. Elastic Demand
•a change in price
results in
a large 
change in
quantity
demanded.
 
•like a washing
machine

14. Inelasticity of Demand
•that a change in price
results in only a small
change in quantity
demanded. In other
words, the quantity
demanded is not very
responsive to changes
in price. Examples of
this are necessities like
food and fue

15. Types of Elasticity
•1- price elasticity
how demand responds to a change in price
•2- cross price elasticity
The cross
 
elasticity of demand 
is an economic concept that measures
the responsiveness in the quantity demanded of one good when the
price for another good changes
•3- income elasticity
how demand responds to a change in income

16. Factors affecting Elasticity of
Demand
•Nature of Commodity
•Availability of Substitutes
•Goods with different Uses
•Income of consumer
•Habit of Consumers
•Price Level
•Time Period
•Joint Demand
•Peak and Off-Peak demand