Dr Manasi Kurtkoti

Head, department of Economics

Dr D. Y Patil ACS College, Pimpri, Pune.
Member, BOS (SPPU and MIT College, Alandi)
Adjunct Professor (COEP)
 Law of Demand and Demand Curve
• Demand Curve is downward sloping from left to
right
Y Law Of Demand:
• Price Other things remaining
constant, fall in prices
X will lead to increase in Quantity

Demanded quantity demanded of the

commodity
 Assumptions of law of demand
Other factors affecting demand remains constant.
Other factors
Taste and
Population preferences
Income

Expectation of Price of related

future prices goods

Seasonal Government
changes policies
 Foundation of law of demand

Law of Diminishing Marginal Utility

“ With every increase in the unit of consumption of
any commodity, the satisfaction obtained by the
consumer from each additional unit of the commodity
goes on diminishing”.
Income effect: change in Real Income
Substitution effect: Effect of related goods namely
substitute and complementary goods
Shift in demand curve: Movement along the same demand
curve
• Other things remaining constant, price changes
demand changes
Y

Price

X
Quantity Demanded

Downward shift in demand curve: Extension of demand

Upward shift in demand curve: Contraction of demand
 Change in demand

Price P

DD
Quantity demanded X

Price remaining constant, demand changes due

to other factors like income, population etc.
Right shift in demand curve: Increase in demand
Left Shift in demand curve: Decrease in demand
 Price elasticity of demand
A medium to measure the rate of change in the
quantity of a product demanded in response to a
small change in the price.
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You