Presentation

ECONOMIC
S

Group No :

Group Members
Noor-Ul-Ain Fazal
Nayab
Faiza Shafiq
Zainab

Law of Demand
(Micro Economic)
Statement : The Price of Services or Goods is Inversely
Proportional to its demand
Explanation: Keeping other factor equal the demand of product will
decrease if its
is increased and Demand of product will increase if
its price is decreased
The Price of The Product or Services is responsible
for the
customers opportunity to
Acquire the product or services. Therefore it directly effect the
demand of the
product or services
Price of the product or services directly influence the customer's
buying behavior
For expensive product or services the customer will try to find cheap
alternative for this.
This will cause decrease in the Demand of Product or

Price(Rs./200mg)

70
60
50
40

De
m

an

Re
la
tio

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ns

hi

20

5 100150 20 25
0
0 0

300350

Demand(packs)

Daily Life Example

Demand of The Product Increase when any Brand offers buy one get one free as
set of product is acquirable in low price.

When Daewoo Express Uplift its ticket prices the costumers try to avail other
ransport services and the demands of Daewoos tickets decreases.

Law Of Supply
(MICROECONOMIC)

Statement : The Price of Services or Goods is Directly Proportional to its

Supply
Explanation: Keeping other factor equal the suppliers offer of a
product or services will increase if the price of the product or services
is increased. And Supplier offer will decrease if the price of product or
service is decreased
Here is the concern of supplier who try to maximize the profit by
increasing the quantity offered for sale.
This phenomenon occurs when the consumer is brand oriented who
dont cares for the price of the product.

Price(Rs./200mg)

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Su

ly
p
p

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300350

Quantity(packs)

Example

The consumer of I phone is brand oriented therefore when the price of I phones
goes up the Stock keeper order in large volume to increase their sales volume

Market Demand
Definition: The Sum of the individual demand for a product from a buyer in

Market
Is called Market Demand.
Explanation: Market Demand is the total demand of and individual product that buyers
order for .
Suppose that Product A is purchased by costumer A, B the demand of each customer is
called individual demand and the overall market demand will be the sum of demands of
Both Customers.
What is Individual Demand?
Quantity of a product demanded by a individual buyer per unit of time at given price.

Individual Demand Curves For A Product

Movement Along Demand Curve:

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Price(Rs./200mg)

Price(Rs./200mg)

A change in price cause a movement along demand curve as in below both

Graph we can observe movement along demand curve

Consumer 1

30
20

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Consumer 2

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Quantity(packs)

5 100150 20 25
0
0 0

300350

Quantity(packs)

MARKET DEMAND CURVE

Price(Rs./200mg)

Market Curve can be obtained by the summation of individual curves

70
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30
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300350

Quantity(packs)

Market Demand Curve

Market Supply
Definition: The Market Supply is the total amount of goods or services all
producers a willing to
provide at the given price during a defined time period. The Market Supply is
the total of all individual producer supplies.
Explanation: Market Supply is the total supply of goods or services that all
producers are willing to provide to supply holders at the price set by producers
Individual Supply: Total Supply provided by a single producer within the
privileged set of price.

Movement Along Supply Curve

Price(Rs.)

Price(Rs.)

ike Demand Curve Change in price cause a change in supply curve as change
n price effects supply directly. So we can observe a movement in supply covers
n both categories of products

25
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10

25
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10

10

5 6

Quantity(packs)
Category A

5 6

Quantity(packs)
Category B

Price(Rs.)

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15
10
10
5

5 6

10

Quantity(packs)

Market Supply = Cat A + Cat B

Normal Goods

uch goods for which the demand increase when income increase and decrease
hen income decrease but price of the good remains constant. With a positive
come elasticity of demand.

Income

come elasticity of demand?

easures the responsiveness of the quantity demanded for a good or service to a
hange in the income of the people demanding the good

Demand Increase from Q1 To Q2

Due To Increase in Income
From A to A1

A1
A

NORMAL GOODS

Q1

Q2

Quantity

Substitute goods
Substitute goods are two goods that
could be used for the same purpose.
If the price of one good increases,
then demand for the substitute is
likely to rise.
Therefore, substitutes have a
positive cross elasticity of demand.

Perfect Substitutes
Two goods are perfect substitutes if the utility consumers get from
one good is the same as another.

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