Law of demand

it includes law of demand, assumptions of law of demand, market demand, individual demand.

1. Law of DEMAND Assumptions, Individual Demand & Market Demand

2. Presented by, Ligin Joseph Rohith K R P R Karthik Kuriakose T D Steema Tomy Sreekutty K A Seethal Sam Anju Thomas

3. Law of Demand Law of demand – there is an inverse relationship between price and quantity demanded. - Quantity demanded rises as price falls, other things constant. - Quantity demanded falls as prices rise, other things constant. What accounts for the law of demand? People tend to substitute for goods whose price has gone up.

4. Assumptions of Law of Demand No change in price of related commodities. No change in income of the consumer. No change in taste and preferences, customs, habit and fashion of the consumers. No change in size of population. No expectation regarding future change in price.

5. Individual Demand “The   individual demand  is the  demand  of one individual  or firm. It represents the quantity of a good that a single consumer would buy at a specific price point at a specific point in time”.

6. Individual Demand Schedule & Curve Price per Apple Adam’s Demand 30 3 25 6 20 9 15 12 10 15

7. MARKET DEMAND Market demand is the aggregate of individual demands of a homogeneous commodity A market demand curve is the horizontal sum of all individual demand curves. This is determined by adding the individual demand curves of all the demanders. Sellers estimate total market demand for their product which becomes smooth and downward sloping curve.

8. MARKET DEMAND FUNCTION The  market demand function  is the horizontal summation of the individuals'  demand functions .

9. From Individual Demands to a Market Demand Curve (1) Price per X Rs.0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 (2) A ’ s demand (3) B” s demand (2) C ’ s demand (3) Market demand 9 8 7 6 5 4 3 2 6 5 4 3 2 1 1 1 16 14 11 9 7 5 3 2 A B C D E F G H C B A D A C E F G Quantity of X demanded per week 2 Rs4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 Price per X (in Rs 4 6 8 10 12 14 16 B Market demand