Demand: Individual Demand Curve and Market Demand for a Good (For CBSE, ICSE, IAS, NET, NRA 2022)

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Law of Demand

The law of demand is given as, “If price of a commodity falls, its quantity demanded increases and if price of the commodity rises, its quantity demanded falls, other things remaining constant.” The law of demand means that, other factors determining the demand remaining constant, price of a commodity and its quantity demanded are inversely related.

Individual Demand Curve

relationship of price and quantity demanded is represented diagrammatically, it is called demand curve. Thus, demand curve is a diagrammatic representation of law of demand. The demand curve shows different quantities of a commodity demanded at different prices in diagrammatic form.

Individual Demand Curve

In fig shows that individual՚s demand for shirts, price and quantity.

Shape of Individual Demand Curve

The demand curve is shaped by the law of demand. In general, this means that the demand curve is downward-sloping, which means that as the price of a good decreases, consumers will buy more of that good.

Market Demand for a Good

The total quantity of a commodity demanded by all the individual buyers in the market at the given price at given time is called market demand of that commodity.

Factors Affecting Market Demand

the factors affecting individual demand for a commodity market demand is also influenced by the following factors:

  • Number of buyers: the number of buyer of a commodity is large, market demand for the commodity will be more. On the other hand, if the number of buyers is small, market demand for the commodity will be less.
  • Distribution of income and wealth: If the distribution of income and wealth is more in favour of the rich, demand for the commodities preferred by the rich is likely to be higher. On the other hand, if the distribution of income and wealth is more in favour of poor, demand for the commodities preferred by the poor is likely to be higher.
  • Climatic condition: It is generally observed that the demand for ice increases during summer season. Similarly, demand for umbrella and raincoats increases during rainy season and demand for woolens increases during winter season. So, the market demand for a commodity is also influenced by the climatic conditions.

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