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Class notes Economic Business Studies- (Poonam Gandhi)-2021-22 Class 11 CBSE, ISBN: 9789389975208
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THEORY OF DEMAND,CONCEPT OF DEMAND
Demand for a commodity is the desire to buy a commodity backed with sufficient purchasing power
and the willingness to spend.
Demand and Quantity Demanded
Demand refers to different possible quantities of a commodity that ' the consumer is ready to buy
at different possible prices of that commodity.
Quantity demanded refers to a specific quantify to be purchased against a specific price of the
commodity.
DEMAND SCHEDULE
"The table relating to price and quantity demanded is called the demand schedule." Concept of
demand schedule incudes:
(I) Individual Demand Schedule, and
(II) Market Demand Schedule.
(I) Individual Demand Schedule
Individual demand schedule refers to demand schedule of an individual buyer/consumer in the
market.
Qx
Px (Quantity Demanded of
(Price of Good-X) Good-X)
₹ (Units)
1 4 Inverse
relationship
b/Ix PxandOx
2 3
Px*Qxt
3 2
04
4 1 PXI 1 x
There is a inverse relationship between own price of the commodity and its quantity demanded.
, (II) Market Demand Schedule
On the assumption that there are only 2 Consumers / buyers in the market.
Px Qx Qx Qx (Consumer A + Consumer B
(Price of (Consumer A) (Consumer B) = Market Demanded)
Good-X) (Units) (Units) (Units)
(₹) (1) (2) (3) = (1+2)
1 4 5 4+5=9
2 3 4 3+4=7
3 2 3 2+3=5
4 1 2 1+2=3
DEMAND CURVE AND ITS SLOPE
(I) Individual Demand Curve
Y
L
4
3
2
-
I
D
O X
I 239
Demand curve slopes downwards from left to right indicating inverse relationship between own price
of the commodity and its quantity demanded. Higher price leads to a fall in quantity demanded; lower
price leads to a rise in quantity demand of a commodity.
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