a. i. meaning and determinants of demand ii. demand schedules and curves iii. the distinction between change in quantity demanded and change in demand.
b. Types of demand: Composite, derived, competitive etc c. Elasticity of demand: determinants, measurements, nature and applications (e.g. revenue). d. Effects of changes in the determinants (price, income and cross elasticities).
(i) identify the factors determining demand; (ii) interpret demand curves from demand schedules; (iii) differentiate between change in quantity demanded and in demand; (iv) compare the various types of demand and their interrelationships; (v) relate the determinants to the nature of elasticity; (vi) compute elasticities; (vii) interpret elasticity coefficients in relation to real life situations.
We have often heard the phrase ‘there is a huge demand for product XYZ in the market’. But what does this exactly mean? What constitutes the demand for a product in the economy? Let us learn about the concept of demand and the determinants of demand in a market.
What is Demand?
Demand in terms of economics may be explained as the consumers’ willingness and ability to purchase or consume a given item/good. Furthermore, the determinants of demand go a long way in explaining the demand for a particular good.
For instance, an increase in the price of a good will lead to a decrease in the quantity that may be demanded by consumers. Similarly, a decrease in the cost or selling price of a good will most likely lead to an increase in the demanded quantity of the goods.
This indicates the existence of an inverse relationship between the price of the article and the quantity demanded by consumers. This is commonly known as the law of demand and can be graphically represented by a line with a downward slope.
The graphical representation is known as the demand curve. The determinants of demand are factors that cause fluctuations in the economic demand for a product or a service.
SECTION FOUR
a. i. meaning and determinants of demand
ii. demand schedules and curves
iii. the distinction between change in quantity demanded and change in demand.
b. Types of demand: Composite, derived, competitive etc
c. Elasticity of demand: determinants, measurements, nature and applications (e.g. revenue).
d. Effects of changes in the determinants (price, income and cross elasticities).
(i) identify the factors determining demand;
(ii) interpret demand curves from demand
schedules;
(iii) differentiate between change in quantity
demanded and in demand;
(iv) compare the various types of demand and
their interrelationships;
(v) relate the determinants to the nature of
elasticity;
(vi) compute elasticities;
(vii) interpret elasticity coefficients in relation
to real life situations.
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Meaning and Determinants of Demand
We have often heard the phrase ‘there is a huge demand for product XYZ in the market’. But what does this exactly mean? What constitutes the demand for a product in the economy? Let us learn about the concept of demand and the determinants of demand in a market.
What is Demand?
Demand in terms of economics may be explained as the consumers’ willingness and ability to purchase or consume a given item/good. Furthermore, the determinants of demand go a long way in explaining the demand for a particular good.
For instance, an increase in the price of a good will lead to a decrease in the quantity that may be demanded by consumers. Similarly, a decrease in the cost or selling price of a good will most likely lead to an increase in the demanded quantity of the goods.
This indicates the existence of an inverse relationship between the price of the article and the quantity demanded by consumers. This is commonly known as the law of demand and can be graphically represented by a line with a downward slope.
The graphical representation is known as the demand curve. The determinants of demand are factors that cause fluctuations in the economic demand for a product or a service.
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