Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsDemand2 Marks
Question
What is demand function?
✓
Answer
Demand function explains the relationship between demand and factors which effect demand. If shown the functional relationship.
If shows the functional relationship.
Individually demand depends on price of goods, income of the consumer, price of relative goods, taste of the consumer, population and other factor.
The Demand function can be represented as:
$Dx = f (Px’ Py’ Pe’ T, Y, U)$
Where, $Dx$ = Demand for commodity $x$
$Px =$ Price of commodity $x$
$Py =$ Price of related commodity $y$
$Pe =$ Expectations Regarding Future Prices
$T =$ Taste of consumer
$Y =$ Income of the consumer
$U =$ Other Factors
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