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DEMAND ANALYSIS FOR BUSINESS STUDIES PPT
- 1. DEMAND ANALYSIS The strategic processof understanding consumer needs. Demand
- 2. CONTENTS Meaning of demand Typesof demand Factors affecting demand Demand function Demand schedule and Demand curve Conclusion bout 29/10/2024 2
- 3. MEANING OF DEMAND 29/10/20243 Demand for a commodity we mean the desire for the commodity backed by purchasing power and the willingness to spend. When a consumer wishes to consume a commodity and has also the necessary purchasing power i.e. income along with willingness to pay, he is said to have demand for the commodity. In short the quantities of commodity that the consumer is willing and able to buy at each possible prices during a given time period is known as demand.
- 4. TYPES OF DEMAND Solutio INDIVIDUALDEMAND The quantity of a commodity a consumer is willing and able to purchase at every possible price during a specific period is known as Individual Demand. Various factors affect (increase or decrease) the demand for a commodity; such as Price of the given Commodity, Price of Related Goods, Income of the Consumer, Tastes and Preferences, and Expectation of Change in the Price in Future. MARKET DEMAND The quantity of a commodity that all consumers are willing and able to purchase at every possible price during a specific period is known as Market Demand. In addition to the factors affecting the individual demand for a commodity, there are other factors also that affect the market demand of the commodity; such as Size and Composition of Population, Season and Weather, and Distribution of Income. 4 Demand can be of two types as follows:-
- 5. FACTORS AFFECTING DEMAND 1.PRICE OF THE COMMODITY Generally, there is an inverse relationship between the price of a commodity and its demand. As the price increases, the quantity demanded tends to decrease, and vice versa (Law of Demand). 3. PRICE OF RELATED GOODS 1. Substitute Goods: An increase in the price of a substitute good (e.g., tea for coffee) may increase the demand for the commodity in question. 2. Complementary Goods: A decrease in the price of a complementary good (e.g., printers for computers) may increase the demand for the commodity. 2.INCOME OF TH E CONSUMERS 1. For normal goods, as consumer income increases, the demand also increases. 2. For inferior goods, as consumer income increases, the demand decreases as consumers switch to higher-quality substitutes. 4. CONSU MER PREFERENCES Changes in consumer tastes, fashion, and preferences can increase or decrease demand for certain goods. For example, if a product becomes trendy, its demand may rise. 5
- 6. 5. EXPECTATIONS OFFUTURE PRICES: 6 . P O P U L AT I O N S I Z E 7 . G O V E R N M E N T P O L I C I E S 8 . S E A S O N A L I T Y A N D W E AT H E R C O N D I T I O N S An increase in population generally leads to higher demand for goods and services. Additionally, demographic factors like age distribution, gender, and income groups also affect demand for specific commodities. Taxes and Subsidies: An increase in taxes may reduce demand, while subsidies can increase demand by lowering the effective price of a commodity. Regulations: Government restrictions or standards can either increase or decrease demand depending on their nature. Demand for certain goods (e.g., ice cream in summer, winter clothing in cold months) can be heavily influenced by seasonal changes and weather patterns. 6 If consumers expect prices to rise in the future, they may increase their current demand to avoid paying more later. Conversely, if they expect a price drop, they may hold off on purchasing.
- 7. DEMAND FUNCTION Demand functionis the functional relationship between demand of the commodity and factor influencing it. Qdx = f (Px, Y, Pr, T, Fx, Po, S, D) Px- Price of the commodity Y- Income of the consumer Pr- Price of related goods T- Taste and preference of consumer Ex- Exception of change in price in future Po- Change in size and consumption S- Climate or seasonal change D- Distribution of income Where, Qdx is the quantity demand of x commodity and F is functions. Bene7
- 8. DEMAND SCHEDULE ANDDEMAND CURVE DEMAND SCHEDULE It is the list or tabular representation of different quantities of commodity being demanded at various level of prices during a given period of time. It is of 2 types: 1. Individual demand schedule 2. Market demand schedule DEMAND CURVE It is a graphical representation of demand schedule where it shows the inverse relationship between the quantity demanded of a commodity with its price, keeping other factors constant. It is also of 2 types: 1. Individual demand curve 2. Market demand curve. 8
- 9. 9 Individual demand schedulerefers to the tabular representation of different quantity of commodity that a consumer is willing and able to buy at each possible prices during a given time period. INDIVIDUAL DEMAND SCH EDU LE DEMAND SCHEDULE MARKET DEMAND SCH EDULE Market demand schedule refers to the tabular representation of different quantity of commodity that all consumer are willing and able to buy at each possible prices during a given period of time.
- 10. PITCH DECK 10 8/03/20XX Individualdemand curve refers to the graphical representation of individual demand schedule of different quantity of commodity that a consumer is willing and able to buy at each possible prices during a given time period. INDIVIDUAL DEMAND CU RVE DEMAND CURVE MARKET DEMA ND CURVE Market demand curve refers to the graphical representation of market demand schedule of different quantity of commodity that a consumer is willing and able to buy at each possible prices during a given time period. It is the horizontal summation of individual demand curve.
- 11. SUMMARY Demand for thegoods and services always fall down if the price of goods and services are high, dissimilar demand for the goods and services always increases if the price of goods and services are low . The success of any business largely depends on sales, and sales depend on market demand behavior. 8/03/20XX 11
- 12. THANK YOU School ofmanagement 8/03/20XX 12