INDIVIDUAL and MARKET Demand Function

INDIVIDUAL and MARKET Demand Function

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  INDIVIDUAL & MARKET DEMANDFUNCTION PRESENTED BY JACKSON DSOUZA 1ST YEAR MCOM SRI POORNAPRAJNA EVENING COLLEGE UDUPI UNIT-2
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  WHAT IS DEMAND? Demandcomprises of three things: Ø Desire of commodity Ø Sufficient money to purchase the commodity and Ø Willingness to spend money to purchase that commodity. It is clear that a want or a desire does not become a demand unless an individual has ability to purchase and willingness to satisfy it.
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  • Demand functionshows the relationship between quantity demanded for a particular commodity and the factors influencing it DEMAND FUNCTION •It can be either with respect to one consumer or to all the consumers in the market .
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  Individual demand function Individualdemand function refers to the functional relationship between individual demand and the factors affecting individual demand. It is expressed as: D = f(Px,Pr ‚Y, T ,F) Where, D = Market demand of commodity x; Px = Price of the given commodity x; Pr = Prices of related goods; T = Tastes and preferences; Y = Income of the consumer; F = Expectation of change in price in future.
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  Price (in ₹) Quantity demanded ofcommodity x (in units) 5 1 4 2 3 3 2 4 1 5 Individual demand schedule refers to a tabular statement showing Various quantities of a commodity that a consumer is willing to buy at various levels of price, during a given period of time. Individual demand schedule
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  Market Demand Function Marketdemand function refers to the functional relationship between market demand and the factors affecting market demand. It can be expressed as : Dx= f(Px Pr Y, T ,F, Po ,S, D) Dx = Market demand of commodity x; Px = Price of the given commodity x; Pr = Prices of related goods; T = Tastes and preferences; Y = Income of the consumer; F = Expectation of change in price in future. Po =Size and composition S = Season and weather; D = Distribution of income.
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  Market demand schedulerefers to a tabular statement showing various quantities of a commodity that all the consumers are willing to buy at various levels of price, during a given period of time. Market demand schedule Price (in ₹) Household A (D1) Household B (D2) Market Demand (in units) [D1+D2] 5 1 2 1+2= 3 4 2 3 5 3 3 4 7 2 4 5 9 1 5 6 11
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  we can saythat individual demand for the commodity is not the same as market demand. Further, individual demand is not influenced by all the factors affecting market demand. CONCLUSION
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