Meaning of Demand
The term demand is defined as the
number of units of particular goods or service that consumer are willing to
purchase during a specific period and under a given set of period.
Demand is distinct from desire and
generally it is confused with desire. We can desire for anything. A mere desire
for a commodity will not encourage a producer to produce unless it is backed by
purchasing power. A desire can be transformed into demand only when,
We have ability to pay i.e., income
Willingness to pay
It is possible to produce goods.
Time period; and
Price
Demand for a commodity is always
expressed in relation to particular price, Place and time. This is so because
with the change in place, time and price demand for a commodity may be different.
Therefore the demand for a commodity is the quantity to be bought by a person
at a particular price place and time. According to Benham, "The
demand for anything, at a given price, is the amount of it which will be bought
per unit of time at that price."
Various
economists give various definitions According to port. Bridge
"The
term demand is defined as the number of units of particular goods or services
that consumers are willing to purchase during a specific period and under a
given set of conditions"
Demand
function
The
change in other factors cause change in demand because these factors cause
shift in demand curse A demand faction also expressed as like.
Qx = Py Px, T,Y,P,E,A,B,........)
Px =
Price of ×commodity
T=Tastes of
preferences,
Y= Income of the
consumer
A= Advertisement
expenditure
Q= quantity
demanded of x commodity
E= Future price
expectation
B= Income
distribution in the economy,
Py =
Price of related goods.
This relation gives the mathematical
relationship bet the quantity demanded of a commodity and various determinant
of demand.
The Demand Function
The
amount of a good that a customer is willing to buy and able to purchase over a
period of time, at a certain price is known as the quantity demanded of that
good. The quantity desires to be purchased may be different from the quantity
of good actually bought by the consumer. As quantity demanded is a flow
concept, the relevant time dimension has to be mentioned which will indicate
the quantity demanded per unit of time. Demand is a relationship between the
price and the quantity demanded, other things remaining constant. Hence the
other things imply, the factors, which influence the decision of the consumer
to buy.
If X1 denotes the
quantity demanded and P1 its price per unit of the good, then other
things remaining constant the demand function will be given as
X1 = f (P1)
The function shows that quantity
demanded depends on the price. This means that any change in price will result
in a corresponding change in the quantity demanded.
The change in the other factors
cause change in demand because these factor cause shift in demand curve. A
demand function also expressed as
Qx
= F (PX, TP, y, PY, E, A, B...........)
PX
= price of X commodity.
TP
= Taste
and preferences
y
= Income
of the consumer
A
= Advertisement
expenditure.
E
= Future
price expectation
QX
= Quantity
demanded of the X commodity.
B
= income
distribution in the economy
PY
= price
of related goods.
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