CONCEPT OF DEMAND

Demand
Demand refers to various quantities of a commodity that a consumer is ready to buy at different possible prices of the commodity at a point of time. 
Quantity Demanded
Quantity demanded is a specific quantity of a commodity to be purchased against a specific price of that commodity at a point of time. 
Demand Schedule
Tabular presentation of the price of a good and it's quantity demanded is called demand schedule. 
Concept of Demand Schedule
Concept of demand schedule includes: 
(1) Individual Demand Schedule
(2) Market Demand Schedule
(1) Individual Demand Schedule
Demand schedule of an individual buyer or consumer in the market is known as individual demand schedule.
(2)  Market Demand Schedule
Demand schedule of all the buyers or consumers in the market is known as market demand schedule.
Demand Curve
Graphical presentation of demand schedule is known as demand curve. 
Like demand schedule, concept of demand curve includes: 
(1) Individual Demand Curve
(2) Market Demand Curve
(1) Individual Demand Curve
Graphical presentation of individual demand schedule is known as individual demand curve.
(2) Market Demand Curve
Graphical presentation of market demand schedule is known as market demand curve.
Slope of Demand Curve
Demand curve normally slopes downward,  indicating negative relationship between price of a commodity and it's quantity demanded.
In the above figure slope of demand curve is denoted by (-) ab/bc.
 Function or Determinants of Demand
Demand function shows the relationship between demand for a commodity and it's various determinants. 
Corresponding to two aspects of demand, individual demand and market demand we have two types of demand function: 
(a) Individual Demand Function
(b) Market Demand Function
Individual Demand Function
Individual demand function shows how demand for a commodity by an individual consumer in the market, is related to its various determinants. It is expressed as under: 
Where, DX= Quantity demanded of commodity-X,
 Px=Own price of commodity-X, 
Pr= Price of related goods
Y=Consumer's income
T=Consumer's tastes and preferences
E= Consumer's expectations
1. Own Price of Commodity:- Higher the price lower the demand, lower the price higher the demand. If other things remain constant. This inverse relationship between own price and demand of a commodity is called law of demand. 
2. Price of Related Goods:- Demand of a commodity is also influenced by change in price of related goods. These are of two types: 
(a) Substitute Goods: These are the goods which can be substituted for each other, such as tea and coffee or ball pen and ink pen. In case of such goods, increase in the price of one causes decrease in the demand for the other good. 
(b) Complementary goods: Complementary goods are those goods which complete the demand for each other, and therefore are demanded together. Pen and ink or bread and butter. In case of complementary goods, a fall in the price of one causes increase in the demand for other and a rise in the price of one causes decrease in the demand for other. 
(3) Income of the consumer: Change in the income of the consumer also influences his demand for different goods. The demand for normal goods tend to increase with increase in income and tend to decrease with decrease in income. On the other hand, the demand for inferior goods tend to decrease with increase in income and tend to increase with decrease in income.
(4) Tastes and Preferences: The demand for goods  and services also depends on individuals tastes and preferences. Demand for those goods increase for which consumers develop strong tastes and preferences. 
(5)  Expectations: If the consumer expects a significant change in the availability of concerned commodity in the near future he decided to change his present demand for the commodity.If the consumer fears acute shortage of the commodity in the near future, he may raise his present demand for commodity at its existing price. 
Market Demand Function
Market demand function shows how market demand for a commodity is related to its various determinants. It is expressed as under: 
Where, Market DX= Market demand for commodity-X. 
Px= Own price for commodity-X
Pr= Price of related goods
Y=Income of the consumer's
T= Tastes and preferences of consumer's
E=Consumer's expectations
N= Number of buyers
Yd= Distribution of income
(1) Population Size/Number of Buyers: Demand for a commodity increases with increase in number of buyers and decreases with decrease in number of buyers. 
(2) Distribution of Income: Market demand is also influenced by the distribution of income in the society. If rich becomes richer demand for luxury goods expected to rise. If poor becomes poorer their demand will shift from normal to inferior goods. 

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