Theory of Demand

CLASS XII ECONOMICS
THEORY OF
DEMAND
1
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)
THEORY OF DEMAND
WARM UP:
i). Desire: Desire for a commodity is the willingness of the person to get that commodity to satisfy
himself.
ii) Want: An intense desire to have a commodity is want.
In ordinary course of life, people use “desire” and “want” as synonyms, but in Economics, they are
two different terms. ‘Desire’ of a commodity arises mainly from the physical needs and/or mental
attitudes of man. In Economics, ‘want’ means effective desire, i.e., a desire which compels a person
to put in some effort so that the desire could be satisfied.
POINT 1: DEFINITION OF DEMAND.

 Demand for any commodity refers to
 the amount of that commodity
 which a consumer
 is willing to purchase
 at a given price
 over a given period of time.
POINT 2: TYPES OF DEMAND

i) INDIVIDUAL DEMAND
Individual Demand for any commodity refers to the amount of that commodity which an
individual consumer is willing to purchase at a given price over a given period of time.
ii) MARKET DEMAND

Market Demand for any commodity refers to the amount of that commodity which all the
individuals (households) in the market are willing to purchase at a given price over a given period of
time.
Some Other Types Of Demand

i) JOINT DEMAND
It refers to the demand of two or more goods which are used together
or demanded jointly. E.g.- Bat, ball and stumps, chalk, board and duster, etc.
ii) COMPOSITE DEMAND

Demand for goods that have multiple uses is called composite
Demand. E.g. – Milk, electricity, etc.
iii) DERIVED DEMAND

It refers to the demand for a commodity that arises because of the demand of some other
commodity.
E.g. – Bricks, cement, etc is derived from the demand of building.
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CLASS XII ECONOMICS
THEORY OF
DEMAND
2
By CS Chandan Gupta
iv) EX-ANTE DEMAND

It refers to the amount of goods that consumers want to or willing to buy during a particular
time period in future.
v) EX-POST DEMAND
It refers to the amount of goods that consumers actually purchased during a specified period.
POINT 3: TYPES OF GOODS

i) NORMAL GOODS
These goods are those goods the demand for which increases with the increase in income of
consumer and decreases with the fall in income .E.g. – Mobile Phone, LED TVs, etc.
ii) INFERIOR GOODS

These goods are those goods the demand for which falls as the income of the consumer
increases.
E.g. – toned milk, broiler chicken, etc.
iii) SUBSTITUTE GOODS

These goods are those goods which satisfy the same kind of demand and can be used in
place of one another. E.g. - tea and coffee, etc.
iv) COMPLEMENTARY GOODS

These are used jointly or together and which complement each other. E.g. – Car and petrol,
pen and ink, etc.
POINT 4: FACTORS AFFECTING DEMAND

A. FACTORS AFFECTING INDIVIDUAL DEMAND
i) PRICE OF THE COMMODITY
There is an inverse relationship between the price of the commodity and the quantity
demanded. Lower the price of the commodity, larger is the quantity demanded and higher the price,
lower will be the quantity demanded.
P QD Inverse
P QD Relationship
ii) INCOME OF THE CONSUMER

Change in income of the consumer influences demand for different goods. The demand for
normal goods increases with the increase in income and on the other hand demand for inferior
goods decreases with the increase in income.
FOR NORMAL GOODS FOR INFERIOR GOODS
Y QD Direct Y QD Inverse
Y QD Relationship Y QD Relationship
CLASS XII ECONOMICS
THEORY OF
DEMAND
3
By CS Chandan Gupta
iii) CONSUMER’S TASTES AND PREFERENCES

The demands for goods depend on individual’s tastes and preferences. Other things
remaining the same demand for goods increases for which consumers develop tastes and
preferences and if a consumer has no taste and preference for a product, its demand will decrease.
iv) PRICES OF RELATED GOODS

If a change in the price of one commodity affects the demand for other commodity, we say
that these two goods are related.
(a) SUBSTITUTE GOODS: In case of such goods, increase in price of one goods (Goods
X) causes increase in demand for other goods (Goods Y).Example:- Tea and Coffee etc.
Px QDy Direct
Px QDy Relationship.
(a) COMPLEMENTARY GOODS
In case of such goods, fall in price of one goods (Good X) causes increase in demand of
other goods (Good Y).Example:-Car and Petrol etc.
Px QDy Inverse
Px QDy Relationship.
v) CONSUMER’S EXPECTATION:
If the consumer expects the price to rise in future they will buy more commodities in present
at existing price and store the goods, and if the consumer expects the price to fall in future, they will
buy less commodities in present and will postpone their demand.
vi) CREDIT FACILITY:

If credit facilities are available to purchase a product the demand for the product
will increase and if there is no credit facility, the demand for the product remains the same.
vii) ECONOMIC CONDITIONS:

The demand for a commodity also depends upon prevailing business conditions in the
country. For e.g., during the inflationary period (a continuous rise in the price level of a commodity),
more money is in circulation and people have more purchasing power. This causes an increase in
demand of various goods even at higher prices. Similarly, during deflation (depression), the demand
for various goods reduces, in spite of lower prices because people do not enough money to buy the
things.
B. FACTORS AFFECTING MARKET DEMAND:

i) CLIMATIC FACTORS:
Demand for different goods depends upon climatic factor because different goods are
needed for different climate, like in winter demand for woolen clothes increases.
ii) PATTERN OF INCOME DISTRIBUTION:

If the income is equitably distributed, there will be more demand. If the income is not
equitably distributed, there will be less demand. For e.g., if national income falls in the hands of rich
people, and poor people gets less income, the demand for luxury goods will increase as major
portion of the national income is falling under rich people.
CLASS XII ECONOMICS
THEORY OF
DEMAND
4
By CS Chandan Gupta
iii) POPULATION (DEMOGRAPHIC STRUCTURE):

Demand increases with increase in population and falls with decrease in the population size,
the number of buyers of the product also tends to increase.
iv) GOVERNMENT POLICY:

If the government imposes tax on various commodities, the prices of the commodities will
increase and if the government incurs expenditure for public welfare, the demand for cement, bricks,
iron, steel, etc, will increase.
v) STATE OF BUSINESS:
The level of demand in a market for different goods depends upon the business conditions of
the country. If the country is passing through boom period, trade is active. The demand for all
commodities tends to rise. But, in the days of depression, when trade is dull, demand tends to fall.
POINT 5: DEMAND FUNCTION.

‘DEMAND FUNCTION’ is the functional relationship between quantity demanded of a commodity
and its various factors.
Symbolically:
Quantity demanded (QDx) = f (factors of demand).
= f (Px, Y, Py, Tastes and Preferences, Govt. policy, etc.)
POINT 6: LAW OF DEMAND:

The ‘LAW OF DEMAND’ states that, other things remaining the same, the quantity
demanded of a commodity increases when its price falls and decreases when price rises.
ASSUMPTIONS TO THE LAW OF DEMAND

i) Tastes and preferences of the consumer remains constant.
ii) There is no change in the income of the consumer.
iii) Prices of the related goods remains constant.
iv) Consumer do not expect any change in the price of the commodity in the near future.
v) etc, etc.
Q) Why does law of demand operate?

OR,
Q) Why does demand curve slopes downwards to the right?
OR,
Q) Why more of goods is purchased when its price falls?
OR,
Q) Why do households demand more of a commodity at lower price?
CLASS XII ECONOMICS
THEORY OF
DEMAND
5
By CS Chandan Gupta
Answer:
(i) LAW OF DIMINISHING MARGINAL UTILITY:
We know that the satisfaction derived from the consumption of successive units goes on
falling, as earlier units have partly satisfied our wants. In this way, every additional unit of the
commodity will give us lesser utility (satisfaction).As the consumer is rational, he would like to
maximize his satisfaction by the consumption of the commodity reaching the equilibrium, i.e., the
point where marginal utility of the commodity is equal to the price of the commodity. It shows the
dependence of law of demand on the law of diminishing marginal utility.
(ii) INCOME EFFECT:

Due to change in the price of the commodity, if the purchasing power of the consumer also
changes, then it is called income effect. Change in the price of the commodity cause a change in
the real income of the consumer. Real Income is that income which is measured in terms of goods
and services. With a fall in price real income increases. The increased real income is used to buy
more units of the commodity.
[Explanation: Miss C goes to market every day with Rs50 in her pocket to buy a dairy milk costing
Rs50 for her best friend Miss S.
Today when she goes to market, she finds that the cost of the dairy milk has fallen to Rs10.
She buys one dairy milk for her best and she is still left with Rs40, which is well known as real
income. Now, she is thinking to buy more four dairy milks for her friends V, A, R, P, increasing the
demand for dairy milk.
Caution:
Income is not increasing. Rather Real Income is increasing.
(iii) SUBSTITUTION EFFECT:

This is the effect on the demand for a commodity as a real for the change in relative price.
When the price of other goods (substitution goods) remains unchanged, this commodity becomes
relatively cheaper, increasing the demand, by shift in the customers.
(iv) SEVERAL USES OF THE COMMODITY:

Many goods have alternative or multiple uses, when the price of such goods are very high, It
will be used for more important uses only and therefore the demand for the commodity decreases.
But when the price falls, the commodity may be put to several uses and therefore the demand
increases. E.g.- milk being for cake, butter, curd, etc.
(v) CHANGE IN THE NUMBER OF CONSUMERS:

When the price of the commodity falls, many consumers who were not buying it at previous
price begin to purchase it and consequently the demand increases. On the other hand, when the
price rises, some of the consumers will withdraw from the market and the demand will decrease.
CLASS XII ECONOMICS
THEORY OF
DEMAND
6
By CS Chandan Gupta
DEMAND SCHEDULE
A demand schedule is a numerical table that shows different quantities of a commodity,
demand at different price, during a given period of time, other things remaining constant.
INDIVIDUAL DEMAND SCHEDULE MARKET DEMAND SCHEDULE
It is a numerical table that shows different It is a numerical table that shows different
quantities of a commodity that would be quantities of a commodity that would be
demanded by or individual at different price demanded by all the individuals or households
during a given period of time, other things (market) at different prices, during a given
remaining constant. period of time, other things remaining constant.
PRICE (in Rs) Q.D. Px A B C M.D.

5 20 5 20 25 30 75
10 15 10 15 20 25 60
15 10 15 10 15 20 45
20 5 20 5 10 15 30
DEMAND CURVE
Graphical representation of a demand schedule is known as demand curve. Therefore, a demand
curve is a curve which shows different quantities demanded at different price during a given period
of a commodity of time, other thing remaining constant.
INDIVIDUAL DEMAND CURVE MARKET DEMAND CURVE
It is a graphical representation of Individual It is a graphical representation of Market

Demand Schedule that shows different Demand Schedule that shows different
quantities of a commodity that would be quantities of a commodity that would be
demanded by an individual at different prices demanded by all the individuals or households
during a given period of time, other things (market) at different price, during a given
remaining constant. period of time, other things remaining
constant.
PRICE PRICE
D1 D2 D 3 MD CURVE
D
D D1 D2 D3 MD CURVE
O QUANTITY DEMANDED O QUANTITY DEMANDED
CLASS XII ECONOMICS
THEORY OF
DEMAND
7
By CS Chandan Gupta
POINT 7: EXCEPTIONS TO THE LAW OF DEMAND.

i) GIFFEN GOODS:
Giffen goods may be defined as those goods whose price effect is positive and income effect
is negative. Giffen goods are those inferior goods in the case where income effect is negative and
stronger than the substitution effect of a change in price. As a result, when the price of such
commodity falls the demand also falls.
Giffen goods (named after the 19th century Economist Sir Robert Giffen who pointed out this
phenomenon for the first time) are those inferior goods on which the consumer spends a large part
of his income and the demand for which falls with a fall in its price. For example, maize and jowar
are inferior goods for an average consumer. They are consumed largely by poor people. As the
price of maize falls, real income of the consumer increases. With an increase in real income, the
consumer may afford to purchase superior food like rice and wheat.
Toned Milk Rs50. Normal Milk Rs80.
Income of the consumer Rs100.
PRICE Q.D.
CASE I
Toned milk – Rs 50 2ltr Rs100
CASE II
Toned milk – Rs 20 1ltr Rs100
Normal milk - Rs 80 1ltr
So, we can see that when the price of toned milk decreases, people use the money to buy superior
goods
ii) ARTICLES OF SNOB APPEAL:

The law of Demand does not apply to the commodities which serve as ‘status symbol’.
Articles of distinction has more demand only if the price are sufficiently high. E.g. – Diamond,
jewellery, costly carpets have more demand because the price are abnormally high. These goods
are purchased for the social symbol. This effect is known as VEBLEN EFFECT .
iii) PRICE AND QUALITY EFFECT:

If the goods are priced high, consumer feels that it is of good quality and will purchase it
even at higher prices.
iv) EMERGENCIES:
In case of emergencies like wars, strikes, etc, people purchase more of goods even though
the prices are high.
CLASS XII ECONOMICS
THEORY OF
DEMAND
8
By CS Chandan Gupta
v) CHANGE IN FASHION:
When a commodity goes out of fashion, consumer will not purchase a larger quantity of this
commodity even when its price is reduced.
vi) EXPECTIONS:
If a price of a commodity is rising today and it is likely to rise more in the future, people will buy more
even at the existing higher price and store it up.
vii) IGNORANCE:
If the consumer is not aware he may purchase more of the commodity even at the higher price.
POINT 8: DIFFERENCES
1.
BASIS EXTENSION OF DEMAND INCREASE IN DEMAND
(i) Meaning It is a situation when the demand It is a situation when demand rises
rises with the fall in its price, other due to change in factors other than
things remaining constant. price.
(ii) Movement Demand curve slopes downward. Demand curve shifts rightward.
of curve
(iii) Causes Fall in price. Consumer’s income, change in price

of substitute goods, etc.
(iv)Example By fall in price of a commodity form By price remaining constant at Rs10,

Rs10 to Rs8, the demand increases the demand increases from 20 to 25
from 20 to 25 units. units
(v) Graphical
Representation PRICE PRICE
D D D1
P1 P
D D1
D
O Q Q1 O Q Q1
QUANTITY DEMANDED QUANTITY DEMANDED
CLASS XII ECONOMICS
THEORY OF
DEMAND
9
By CS Chandan Gupta
2.
BASIS CONTRACTION OF DEMAND DECREASE IN DEMAND
(i) Meaning It is a situation when the demand falls It is a situation when the quantity
with the rise in its price, other things demanded falls because of factors
remaining constant. other than price.
(ii) Movement The demand curve moves from

of curve downwards to upwards. The demand curve shifts leftward.
(iii) Causes Rise in price. Consumer’s income, change in price

of substitute goods, etc.
(iv) Example By rise in the price of a commodity By price remaining constant at Rs10,
from Rs10 to Rs12, the demand the demand decreases to 15 from 20
decreases from 20 to 15 units. units.
(v) Graphical
Representation
PRICE PRICE
D D1 D
P1
P P
D1 D
D
O Q1 Q
QUANTITY DEMANDED O Q1 Q
QUANTITY DEMANDED
CLASS XII ECONOMICS
THEORY OF
DEMAND
10
By CS Chandan Gupta
3.
BASIS CHANGE IN QUANTITY DEMANDED CHANGE IN DEMAND
(i) Meaning Other things being equal, if the quantity If more or less quantity of a
demanded increases or decreases due to commodity is demanded at the
fall or rise in the price of the commodity same price due to change in the
alone, it is known as change in quantity factors other than price, then, it is
demanded. known as change in demand.
(ii) Alternate Movement along the demand curve. Shift in demand curve.
Name
(iii) Cause It occurs due to change in price. It occurs due to factors other than
price.
(iv) Example
PRICE (In Rs) DEMAND PRICE (In Rs) DEMAND
10 20 units 10 20 units
(v) Graphical PRICE PRICE

Representation
D
D1 D D2
P1
P P
P2
D D1 D D2
O Q1 Q Q2 O Q1 Q Q2
QUANTITY DEMANDED QUANTITY DEMANDED
(vi) Leads to Extension and Contraction of Demand. Increase and Decrease in

Demand.
CLASS XII ECONOMICS
THEORY OF
DEMAND
11
By CS Chandan Gupta
4.
BASIS NORMAL GOODS INFERIOR GOODS
(i) Meaning Normal goods are those goods Inferior goods are those goods
whose demand increases with the whose demands have inverse
rise in income and decreases with relation with income of the
the fall in income. consumer.
(ii) Income effect POSITIVE NEGATIVE
(iii) EXAMPLE Reynolds pen, etc. Maize, grain, etc.
(iv)DEMAND PRICE PRICE

CURVE D D
D D
INCOME INCOME
D D
(v)DEMAND CURVE
WITH RESPECT TO
INCOME
D D
POINT 9: DEMAND CLASSIFICATION.

CLASSIFICATION OF DEMAND
KINDS OF DEMAND KINDS OF DEMAND ON THE OTHER TYPES

OF DEMAND/ BASIS OF NO. OF CONSUMER INTERRELATED
DEMAND
i) Price Demand i) Individual Demand i) Joint Demand

ii) Income Demand ii) Market Demand ii) Composite Demand
iii) Cross Demand iii) Derived Demand
CLASS XII ECONOMICS
THEORY OF
DEMAND
12
By CS Chandan Gupta
PRICE DEMAND INCOME DEMAND CROSS DEMAND

It refers to various quantities of It refers to various quantities of It refers to the quantity of a
commodities or services that commodities or services commodity which would be
are purchased at a given time purchased by the consumer at demanded as a result of
and at given prices from the different income levels. Factors changes in the price of related
market. Factors other than other than income, like price of goods, i.e., complementary or
price like consumer’s tastes the commodity, price of related substitute.
and preferences, consumer’s goods, consumer’s tastes and
income, price of related goods, preferences, etc are constant.
are constant. Price demand Income demand has positive In case of substitute goods
has an inverse relationship relationship with the income.
with the price. PRICE DEMAND
(Px) (DY)
PRICE DEMAND INCOME DEMAND 10 5 units

(Px) (Dx) (Yx) (Dx) 15 10 units
15 10 units 20 5 units PRICE
20 5 units D
PRICE INCOME
D D
D
O QUANTITY DEMANDED
In case of complementary
goods
PRICE DEMAND
D
(Px) (DY)
O QUANTITY DEMANDED
O QUANTITY DEMANDED 10 20 units
15 10 units
20 5 units
PRICE
D
O QUANTITY DEMANDED
CLASS XII ECONOMICS
THEORY OF
DEMAND
13
By CS Chandan Gupta
POINT 10: EXTRA INNINGS

1. IMPORTANCE OF LAW OF DEMAND
i) DETERMINATION OF PRICES
The study of law of demand is helpful for the demand to fix the price of the commodity. It can
help the management in deciding whether how much increase or decrease on the price of the
commodity is desirable.
ii) IMPORTANCE TO FINANCE MINISTRY

The study of the law is the great advantage to the finance ministry,if by raising the tax the
price increases to such an extent that the demand is reduced consistently then it is of no use to
increase the tax because revenue will remain the same.
iii) IMPORTANCE FOR PLANNING

The law of demand has a great importance for the planning commission.
iv) IMPORTANCE FOR PRODUCERS

The Law of Demand provides guidelines to the producers regarding the production of those
goods whose prices have reduced. The law of demand has a great importance for the planning
commission.
v) IMPORTANCE FOR THE CONSUMER

The Law of Demand tells us that with the fall in price, the consumer will buy more of the
commodity and vice versa to maximize his satisfaction.
QUESTION BANK (HOTS)

1/2 Mark Questions
1) A rise in the income of the consumer X leads to a fall in the demand for that good by that
consumer. What is the good X called?
2)When demand for a good falls due to rise in its own price, what is the change in demand called?
3)What happens to the demand for a good when the price of substitute goods falls?
4) How does an increase in the income affect the demand curve for an inferior good?
5)What causes an upward movement along the demand curve?
6) What do you mean by Real Income?
7)When will rise in demand be called expansion of Demand and when will it be called an increase in
demand?
8)Mention one factor that causes a leftward shift of the demand curve?
9) What is the shape of Demand Curve?
10) What do you mean by Derived Demand?
11) Explain Composite Demand.
12)Explain with an example, what kind of a commodity will have an inverse relationship between
income and demand?
13) What do you mean by Demand function.
CLASS XII ECONOMICS
THEORY OF
DEMAND
14
By CS Chandan Gupta
3/4 Mark Questions

1)How does the change in the price of related goods affect the demand of a commodity? Explain.
OR
Explain the effects of the rise in the prices of related goods on the demand of a good.
2) X and Y are substitute goods. Explain the effect of a fall in the price of X on demand of Y.
3)How will an increase in the price of tea affect the demand for sugar? Explain with diagram.
4) When is a good called i)normal good, and ii) an inferior good.
OR
Give meanings of normal goods and inferior goods. Give two example of each.
5) Can the same good be normal for some body and inferior for others. Explain with appropriate
examples.
6) Give three reasons (or causes) of a leftward shift of demand curve.
7) Deduce Market Demand Curve from Individual Demand Curves.
8)Explain Giffen goods.
9) What do you mean by ‘other things remaining constant’ in the definition of Law of Demand?
6 Marks Questions
1)Explain with the help of diagram the effect of the following changes on the demand of a
commodity:
i) a fall in the price of substitute goods ii) a fall in the income of its buyer.
2)Explain with the help of diagrams the effect of the following changes on the demand of a
commodity:
i) a fall in the price of related goods ii) a rise in the income of its buyer.
3)Differentiate between i) Normal and Inferior Goods ii) Complementary and Substitute Goods
4)Differentiate between i) Giffen and Inferior Goods ii) Income and Substitution Effect.
5)Explain the effects of increase in income of the buyers of the good X on the demand of Good X.
Use diagram showing demand for good X on the x-axis and is price on y-axis.
THE END
INTORSPECTION TIME
 Don’t Stop When You Are Tired. Stop when You Are Done.
 Build Your Own Dreams, Or Someone Else will hire You To Build
Theirs.
 Winners Are not People Who Never Fail, But people Who Never
Quit.
 If Your Dreams Don’t Scare You, They Aren’t Big Enough.
 If You Want to Have The Fruit, You must “Climb” The Tree.
 The Only Way To Do GREAT WORK is to LOVE What you Do.

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CLASS XII ECONOMICS

ii) Want: An intense desire to have a commodity is want.

POINT 1: DEFINITION OF DEMAND.

POINT 2: TYPES OF DEMAND

ii) MARKET DEMAND

Some Other Types Of Demand

ii) COMPOSITE DEMAND

iii) DERIVED DEMAND

iv) EX-ANTE DEMAND

POINT 3: TYPES OF GOODS

ii) INFERIOR GOODS

iii) SUBSTITUTE GOODS

iv) COMPLEMENTARY GOODS

POINT 4: FACTORS AFFECTING DEMAND

ii) INCOME OF THE CONSUMER

FOR NORMAL GOODS FOR INFERIOR GOODS

iii) CONSUMER’S TASTES AND PREFERENCES

iv) PRICES OF RELATED GOODS

vi) CREDIT FACILITY:

vii) ECONOMIC CONDITIONS:

B. FACTORS AFFECTING MARKET DEMAND:

ii) PATTERN OF INCOME DISTRIBUTION:

iii) POPULATION (DEMOGRAPHIC STRUCTURE):

iv) GOVERNMENT POLICY:

POINT 5: DEMAND FUNCTION.

= f (Px, Y, Py, Tastes and Preferences, Govt. policy, etc.)

POINT 6: LAW OF DEMAND:

ASSUMPTIONS TO THE LAW OF DEMAND

Q) Why does law of demand operate?

(ii) INCOME EFFECT:

(iii) SUBSTITUTION EFFECT:

(iv) SEVERAL USES OF THE COMMODITY:

(v) CHANGE IN THE NUMBER OF CONSUMERS:

INDIVIDUAL DEMAND SCHEDULE MARKET DEMAND SCHEDULE

PRICE (in Rs) Q.D. Px A B C M.D.

It is a graphical representation of Individual It is a graphical representation of Market

POINT 7: EXCEPTIONS TO THE LAW OF DEMAND.

Toned Milk Rs50. Normal Milk Rs80.

Income of the consumer Rs100.

ii) ARTICLES OF SNOB APPEAL:

iii) PRICE AND QUALITY EFFECT:

(iii) Causes Fall in price. Consumer’s income, change in price

(iv)Example By fall in price of a commodity form By price remaining constant at Rs10,

(ii) Movement The demand curve moves from

(iii) Causes Rise in price. Consumer’s income, change in price

(v) Graphical PRICE PRICE

(vi) Leads to Extension and Contraction of Demand. Increase and Decrease in

(ii) Income effect POSITIVE NEGATIVE

(iii) EXAMPLE Reynolds pen, etc. Maize, grain, etc.

(iv)DEMAND PRICE PRICE

O QUANTITY DEMANDED O QUANTITY DEMANDED

POINT 9: DEMAND CLASSIFICATION.

KINDS OF DEMAND KINDS OF DEMAND ON THE OTHER TYPES

i) Price Demand i) Individual Demand i) Joint Demand

PRICE DEMAND INCOME DEMAND CROSS DEMAND

PRICE DEMAND INCOME DEMAND 10 5 units

POINT 10: EXTRA INNINGS

ii) IMPORTANCE TO FINANCE MINISTRY

iii) IMPORTANCE FOR PLANNING

iv) IMPORTANCE FOR PRODUCERS

v) IMPORTANCE FOR THE CONSUMER

QUESTION BANK (HOTS)