Demand

The demand function shows the relation be­tween the quantity demanded of a commodity by the consumers and the price of the product. These functions are probably the most important tools used by economists. While many variables deter­mine the quantity consumers wish to purchase in a market, the price of the commodity is perhaps the most important one. A demand function is a list of prices and the cor­responding quantities that individuals are willing and able to buy at a fixed point of time. We may note at the outset that demand is a function (or schedule), not a specific quantity. It is formally de­fined as a schedule of the total quantities of a com­modity or service that will be purchased at various prices at a particular point of time. Hence when we refer to the demand for meat or the demand for mo­tors cars in India, we are considering the amounts that consumers are willing and able to purchases at various prices. The word ‘demand’ is a broad con­cept referring to the entire schedu...

  Demand is generally classified on the basis of various factors, such as nature of a product, usage of a product, number of consumers of a product, and suppliers of a product. The demand for a particular product would be different in different situations. The different types of demand  are discussed as follows:- i.  Individual and Market Demand: It refers to the classification of demand of a product based on the number of consumers in the market.  Individual demand can be defined as a quantity demanded by an individual for a product at a particular price and within the specific period of time. It is influenced by the price of a product, income of customers, and their tastes and preferences. On the other hand, the total quantity demanded for a product by all individuals at a given price and time is regarded as market demand. ii. Organization and Industry Demand: It refers to the classification of demand on the basis of market. The demand for the products of an organi...