Demand And Supply – Basic Concepts

This section introduces the fundamental concepts of demand and supply, outlining their definitions and the factors affecting them.

Meaning Of Demand

Demand is the desire to purchase a good, coupled with the ability and willingness to pay for it.

Factors Affecting Demand (Determinants Of Demand)

Demand is influenced by various factors, known as determinants, which include price, consumer income, preferences, related goods prices, expectations, and advertising.

Law Of Demand

The Law of Demand states that, all else being equal, a decrease in the price of a commodity leads to an increase in the quantity demanded, and vice versa.

Demand Schedule And Demand Curve

The demand schedule presents a table of quantities demanded at various prices, while the demand curve graphically illustrates the inverse relationship between price and quantity demanded.

Meaning Of Supply

Supply refers to the quantity of a good that producers are willing and able to sell at various prices over a specific time period.

Factors Affecting Supply (Determinants Of Supply)

Supply is influenced by various determinants including the price of the commodity, production costs, and technology.

Law Of Supply

The Law of Supply states that, all else being equal, an increase in the price of a commodity results in an increase in the quantity supplied of that commodity.

Supply Schedule And Supply Curve

This section explains the concepts of supply schedule and supply curve, emphasizing their roles in understanding the relationship between the price of a commodity and the quantity supplied.

Market Equilibrium

Market Equilibrium is the point where quantity demanded equals quantity supplied, determining the equilibrium price and quantity.