Economics 1 Marks Each

The law of demand holds true only on the condition that the factors influencing demand other than the price remains constant. Hence it is…

Assuming other factors constant when the price falls or rises there is a possibility of expansion – contraction of demand.

When the demand of the concerned commodity changes in response to the change in price of its related good either substitute or complementary good), then the extent of such change in demand is called cross elasticity or cross-price elasticity of demand. The cross-price elasticity may be a positive value or negative value, depending on whether the goods are complementary or substitutes.

The quantity of a commodity which a buyer desires, is able and willing to buy at a given price at a given point of time is called demand.

When the direction of change in demand due to a change in income are in the same direction then the income elasticity is positive.

The income elasticity of demand is negative in case of inferior goods.

The fall in price increases the real income of the consumer which in turn increases the demand for commodity. This is income effect.

Giffen good is the good or which income effect is more important and negative. E.g. Jower is a giffen good compare to Wheat.

When other determinants of demand remain unchanged, the rise in demand of a goods when its price falls is called expansion of demand.

A status symbol goods, very cheap goods and inferior goods are exceptional from law of demand.

The price and demand are inversely related because of income and substitution effect.

The demand curve is negatively slopped because there is inverse relationship between price and demand.

The demand curve is negatively slopped.

The schedule showing willingness of a consumer to buy different quantities of goods at varies prices is called demand schedule.

The taste and preferences of the consumer, income, price of substitutes or complementary goods, and population is assumed to be constant while explaining the law of demand.

According to Marshall, "When other factors influencing demand remain unchanged, if price of a goods falls, its demand expands and price of a goods rises, Its demand contracts.” It means that there is inverse relationship between price and demand.

The cross elasticity of demand measures the change in demand for car due to a change in price of petrol.

The demand curve is parallel to horizontal axis and vertical axis in case of perfectly elastic and perfectly inelastic demand respectively.

If other factors remain constant, the change in demand due to the change in income of the consumer can be measured by the income elasticity of demand.

It is useful to know the effects of changes in price of substitutes and complementary goods on the demand for the commodity.

The price elasticity of demand is t he ratio of proportionate change in demand of the commodity to the proportionate change in price of the same commodity.

The amount of change in demand due to the changes in factors affecting demand is measured by the elasticity of demand.

The change in price makes the commodity cheaper compare to its relative goods which increase the demand. The is known as substitution effects.

The decreases in price increase the real income of the consumer which in turn increases the purchasing power. The increases in purchasing power expand the demand.

The market demand is derived from the summation of the individual demands.

During a particular period, demand made by an individual or family for a commodity at different prices is called individual demand.

The contraction of demand shifts the point on demand curve to the left.

The decrease in demand shifts the demand curve to the left side. The new demand is parallel to the original demand curve.

If price remains constant, the decreases in demand due to change in other factors is known as decreases in demand.

If the price remain constant, the increases in demand due to change in other factors is known as Increases in demand.

Demand is the quantity of a commodity which a buyer desire, is able and willing to buy at a given price and a given point of time.

When the demand of concerned commodity changes is response to the change in price of its related goods then the extent of such change in demand is called cross elasticity of demand.

According to Marshall, ‘if other factors remain constant, the demand expands with a fall in price and demand contracts with an increases in price. It means that there is inverse relationship between price and demand.

The amount of change in demand due to the changes in factors affecting demand is measured by the elasticity of demand.

The income effects is negative in case of inferior goods.

The slopes of the different individual demand curves is different due to taste sand preferences of the consumer.

The common characteristic of individual and market demand ?

The decrease in demand shifts the demand curve to the left side. The new demand is parallel to the original demand curve.

The increase in demand shift the demand curve to the right side. The new demand curve is parallel to the qrigional demand curve.