Demand

De m a n d
Definitions
Market: an effective arrangement which enables buyers and sellers to exchange
goods and services and determine price.
Price: the value of a commodity expressed in terms of a currency.
Value: the power a commodity has which enables it to be exchanged with other.
commodities. It is referred to as “value in exchange”.
Consumer: a person who is willing to buy (demand) goods and services for a price.
Supplier: a person who is willing to sell (supply) goods and services for a price.
Demand: the quantity of a commodity consumers are willing and able to buy at a
given price over a given period of time.
Supply: the quantity of a commodity offered for sale at a given price over a given
period of time.
Demand
Definition: The willingness and ability to buy a product at a particular
price over a period of time
In Economics, demand is the Effective Demand. Demand is effective when

demand is backed up by purchasing power. Purchasing power means the
ability to pay.
Want (desire) and demand are different. Demand is desire backed up by the
willingness and ability to pay for it.
Demand and Price
Demand and price are inversely related. When price increases the
demand will decrease. At higher fewer will be demanded and the more
will be demanded at lower price.
Individual Demand and Market Demand
Individual Demand is the quantity demanded for

a product by only one consumer.
Market Demand is the quantity demanded for a

product by all its consumers. It is the horizontal
summation of all the individual demand.
Law of demand
The Law of Demand states that “other things being equal (ceteris
paribus) more will be demanded at lower prices than at higher
prices and vice-versa”. That is, quantity demanded (QD) increases
as price decreases and vice-versa.

Demand Schedule
A demand Schedule is a table which shows the
quantities demanded of a product at a range of
prices over a given period of time.
Demand Curve
A demand curve is a graphical representation of the quantities demanded of a product at a given price
over a given period of time.
A normal demand curve always slopes downward from left to right; this is because there is a negative
relationship between price and quantity demanded. A negative relationship means when price goes
up the quantity demanded falls and vice-versa.
When drawing a demand curve, the y-axis should be labeled ‘price’ and the x-axis as ‘quantity
demanded’.
Draw on your own a demand curve using the demand schedule given above.
Price Quantity demanded
50 2200
45 2500
40 3000
35 3800
30 5000
25 7000
Movement along the Demand Curve
Movement along the demand curve occurs due to changes in price. When the price of a good
change, the quantity demanded of that product also changes. Other things being equal, more
will be demanded at lower prices than at higher prices and vice-versa.
There are two types of movement of the demand curve. They are:
(a) Extension in Demand ( Occurs due to decrease in price ).

b) Contraction in Demand (occurs due to an increase in price)
EXTENSION IN DEMAND Extension in demand refers
to a downward movement along the demand curve due
to a fall in price. It is an increase in the quantity
demanded due to a fall in price.
CONTRACTION IN DEMAND :Contraction in
demand refers to an upward movement along the
demand curve due to a rise in price. It is a decrease in
the quantity demanded due to a rise in price.
Changes in demand.
Demand for goods and services can be changed in two ways. They are
movement along the demand curve and movement of demand curve.
Price
 Increasein price leads to a fall in quantity demanded
known as contraction of demand. On the other hand,
decrease in price leads to a rise in quantity demanded
known as extension of demand. These changes are
shown below in graphical form
Movement along demand curve
Movement of the Demand Curve
Movement of the demand curve or a shift in demand curve occurs due to
changes in the non-price factors of demand (that is, factors other than
price).
There are two types of movement of the demand curve:
 Decrease in Demand
 Increase in Demand
INCREASE IN DEMAND
An increase in demand means, more is now demanded at each and every
price. When there is an increase in demand the demand curve shifts to
the right. In the diagram the demand curve shifts to the right from D to
D1.
Decrease in demand
A decrease in demand means, less is now demanded at each and every
price. When there is a decrease in demand the demand curve shifts to the
left. In the diagram the demand curve shifts to the left from D to D1.
SHIFTS IN DEMAND
 Changes in income
Other things remaining same
Disadvantages of a Soletrader business
The owner has to suffer all the

loss by him self
• Sometimes the owner ends up
making wrong decisions
• Unlimited liabilities
Our presentation came
to an end. We hope
that you all got a
bunch of information
about Soletraders
from our presentation!
Thank you 

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De m a n d

Price: the value of a commodity expressed in terms of a currency.

In Economics, demand is the Effective Demand. Demand is effective when

Individual Demand is the quantity demanded for

Market Demand is the quantity demanded for a

paribus) more will be demanded at lower prices than at higher

prices and vice-versa”. That is, quantity demanded (QD) increases

as price decreases and vice-versa.

(a) Extension in Demand ( Occurs due to decrease in price ).

The owner has to suffer all the

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