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3 A Demand Analysis
Introduction : Demand Schedule :
You have already studied the concept of Demand schedule is a tabular representation
utility in the previous chapter. Utility is the basis of the functional relationship between price and
of demand. Utility may generate a desire or a quantity demanded for a particular commodity.
need to have a particular commodity, but utility A demand schedule may be either individual
on its own cannot generate demand for the demand schedule or market demand schedule.
commodity. This chapter is an effort to analyse Individual Demand Schedule :
the concept of demand. Demand analysis is Individual demand is the quantity of a
concerned with consumer behaviour. commodity demanded by a consumer at a given
Meaning of Demand : price during a given period of time.
In ordinary language, demand means a Individual demand schedule is a tabular
desire. Desire means an urge to have something. representation showing different quantities of
In Economics, demand means a desire which is commodities that an individual consumer is
backed by willingness and ability to pay. prepared to buy at various prices over a given
For example, if a person has the desire to period of time.
purchase a television set but does not have This can be explained with the help of the
the adequate purchasing power then it will be following individual demand schedule.
simply a desire and not a demand. Individual demand schedule :
Thus, demand is an effective desire. All Table 3.1
desires are not demand. Price of commodity Quantity demanded of
In short, ‘x’ ( ` ) commodity ‘x’ (in kgs)
Demand = Desire + willingness to 10 1
purchase + Ability to pay. 8 2
6 3
Try this : 4 4
2 5
Identify the concepts :
Table 3.1 shows different quantities of
1) A poor person wants to have a car ……
commodity ‘x’ purchased by an individual
2) A rich person bought a car ……
consumer at various prices. It can be observed
that less quantity of commodity is demanded at
Definition of Demand :
rising prices and more quantity of commodity
According to Benham, “the demand for is demanded at falling prices. It indicates an
anything at a given price is the amount of it, inverse relationship between price and quantity
which will be bought per unit of time at that demanded.
price.”
Individual Demand Curve :
Thus, following are the features of demand :
Individual demand curve is a graphical
1) Demand is a relative concept. representation of the individual demand
2) Demand is essentially expressed with schedule.
reference to time and price. Fig. 3.1 represents an individual demand curve
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