Law of demand and supply - Unitedworld School of Business

2. Demand Supply ApproachDemand Supply Approach

3. Supply and Demand Analysis
1. The demand schedule
2. The demand curve
3. Demand shift s
Elasticity of demand
4. Price elasticity of demand
5. C alculating elasticities
6. Elasticity and revenue
7. Income elasticity of demand
8. Cross elasticity of demand
9. Analysis of supply
10. The supply schedule
11. The supply curve
12. Behind the supply curve
13. Shift in supply
14. Pr ice elasticity of supply
Equilibrium of supply and demand curves
15. Equilibrium with supply and demand curves
16. Effect of shift in supply or demand
17. Interpreting the changes in prices and quantity
18. Simultaneous shift in supply and demand
19. Rationing by prices
A pplying supply and demand
20. Impact of a Tax on price and quantity
Prices fixed by law
21. Minimum floor and maximum ceilings

4. Demand FunctionDemand Function
Amount of goods that a consumer is
willing top buy and able to purchase
over a period of time is known as
quantity demanded for that good
Flow concept
Demand is relationship between
price and quantity demanded other
things remaining constant
X1 = f {P1}

5. Demand ScheduleDemand Schedule
Price
Quantity Demanded
500 10 lakhs
450 11 lakhs
400 12 lakhs
350 13 lakhs
300 14 lakhs
250 15 lakhs
200 16 lakhs
150 17 lakhs

6. Demand CurveDemand CurvePrice
Demand
Demand Curve
0
Y
X

7. Law of DemandLaw of Demand
Demand curve depicts the inverse
relationship between price and quantity
demanded
Downward sloping
Other things remaining the same, if the
price of any good decreases its quantity
demanded increases and vice versa
Exceptions – Giffen Goods, Veblen effect,
Future expectations, share market

8. Factors influencing the Demand CurveFactors influencing the Demand Curve
Prices of close substitutes and
complements
Income of the consumer
Existing wealth of the consumer
Change in the testes and preferences
of the consumer
Expectations regarding future
changes in the prices
Population
Special influence – season, law

9. Increase in Demand (Shift in demand curve)Increase in Demand (Shift in demand curve)
An increase in income
An increase in wealth
An increase in prices of substitutes
A decrease in the prices of
complements
A change in the taste and
preferences in favor of good
Expectations of a future increase in
price of a good

10. Increase in demandIncrease in demandY
0 X
Old Demand
Curve
New Demand
Curve
Price
Quantity Demanded

11. Decrease in Demand (Shift in demand curve)Decrease in Demand (Shift in demand curve)
An Decrease in income
An Decrease in wealth
An Decrease in prices of substitutes
A Increase in the prices of
complements
A change in the taste and
preferences against the good
Expectations of a future decrease in
price of a good

12. Decrease in demandDecrease in demandY
0 X
Old Demand
Curve
New Demand
Curve
Price
Quantity Demanded

13. Changes in Quantity Demanded vs. Changes in DemandChanges in Quantity Demanded vs. Changes in Demand
Changes in quantity
demanded
P
P2
P1
0
Q1 Q2
D
D
X
Changes in demanded
P
P2
P1
0
Q1 Q2
D
D
D1
D1
X

14. Campus OverviewCampus Overview
907/A Uvarshad,
Gandhinagar
Highway,
Ahmedabad –
382422.
Ahmedabad Kolkata
Infinity
Benchmark, 10th
Floor, Plot G1,
Block EP & GP,
Sector V, Salt-
Lake,
Kolkata – 700091.
Mumbai
Goldline Business
Centre Linkway
Estate,
Next to Chincholi Fire
Brigade, Malad
(West), Mumbai – 400
064.

15. Thank YouThank You