Chapter-14

DEMAND AND LAW OF DEMAND

I~ this c~a~ter, we ~hall study the law of demand and in the next the elasticity of demand. But before we
· analy~_e them, 1t 1s essential to understand the nature of the term 'demand' in economics.
1. MEANING OF DEMAND
The demand for a commodity is its quantity which consumers are able and willing to buy at various
during a·given period of time. So, for a commodity to have demand the consumer must possess willingneprices ss to
buy it, the ability or means to buy it, and it must be related to per u~it of time i.e. per day, j,er week, per month
or per year. Demand is a function of price (p): income (y), prices of related goods (pr) and tastes (t) and
expressed as D=f(p,y,pr, t). When income, prices of related goods and tastes are given, the demand function is
D=f(p). It shows the quantities of a commodity purchased at given prices. 1n the Marshallian analysis, is
other determinants of demand are, taken as given and constant. the
·
2. FACTORS INFLU ENCIN G DEMAND
The factors which determine the level of demand for any commodity are the following: ·
1. Price. The higher the price of a commodity, the lower the quantity demanded. The lower the price, the
higher the quantity demanded.
2. Prices of other Commodities. There are three types _of commodities in this context.
Substitutes. If a rise (or fall) in the price of one commodity leads to an increase (or decline) in the demand
for another commodity, the two commodities are said to ·be s~bstitutes. In other words, substitutes are those
commodities which satisfy similar wants, such as tea and coffee. If the price of coffee falls, the demand
coffee rises which brings a fall in the demand for tea because the consumers of tea shift their demand to coffee for
which has become cheaper. On the other hand, if the price of coffee rises, its demand will fall. But the demand
for tea will rise because the consumers of coffee will shift their demand to tea .
Complementary Commodities. Where the demand for two commodities is linked to each other, such
as
cars and petrol, bread and .butter, tea and sugar, etc., they are said to be complementary goods. Cqmplementjlry
goods are those which cannot be used without each other. If, say, the price of cars rises and they become
expensive the demand for them will fall and so will the demand for petrol. On the contrary, if the price of
cars
falls and they become cheaper, the demand for them will increase and so will. the demand for petrol.
Unrelated Goods. If the two commodities are unrelated, say refrigerator and bicycle, a change in the
price
of one will have no effect on the quantity demanded of the other. .
3. Income. A rise in the consumer's income raises the demand for a com·modity, and a fall in his income
reduces the demand for it.
4. Tastes. When there is a change in the tastes of consumers---in favour of a
commodity, say due to fashion, its demand will rise, with no change in its price, in the Table 14.1
prices of other commodities, and in the income of the consumer. On the other hand, Demand Schedule
change in tastes against a commodity leads to a fall in its demand, other factors Price Quantity
affecting demand remaining unchanged. (Rs.) (units)
3. AN INDIV IDUAL 'S DEMAND SCHEDULE AND CURVE 6 10
5 20
An individual consume r's demand refers to the quantities of a commodity
~emanded by him at various prices, other things remaining equal (y,pr and t). An 4 30
llldividual's demand for a comm'odity is shown on the demand schedule and on the 3 40
demand curve. A demand schedule is a list of prices and quantities and its graphic 2 60
representation is a demand curve. I 80
 94 : Microeco'itonuc Theory
h the price is Rs 6, the 6
edu le _rev eals tha t _w e: ens to be Rs 5, the
The demand sch th e. h PP 1 DD is the demand
quantity demanded is IO units. If e pric 1 r:c hed ul~ . The dotted 5
~:J
quantity demanded is 20 _units, and so ond
-various pri ce- qua nti ty
curve drawn on the basis ofdthi abhove "t~e nd oints". The first
points P, Q. R, S, T an s ow ... 4 -
thfiemt dd~~!d die remaining pric e.. Cl)
comb_ina!ion~. Marshall callsh t e irs o , . 0
"i:: 3
combmahon 1s rep resented by .., a.
towards Dr
quantity combinations move to.,the right
DULE AN D CU RV'E
4. THE MARKET D~MAN1> SCHE
many consume~s of a
In a market there is not one <3on~~er but depicted on a de~and 1
dity is
commodity. The ~arket demand ofa commow the sum total of various 1

schedule and a demand curve. They sho at various prices. Sup pos e .__ i--, -... .,t- -1i ---- --1 ---- D
quantities demanded by all the individualsa IJlarket wJ10 purchase th~ 0 . 1O2030 40 60 80
there are three indi vidu als A, B and C in Quantity Demanded
ed. u l~ for the cor pm odi ty is dep icte d in
commodity. T~e ·d~mand sc~ rese nts th~ ma~ket ;_demand ; . • Fig. 1 _1 ,
T~ble 2 The las~ co~umn . (5) of ~he Tab ~e re~ . .
vM1 ous pnc ~s. It ~s arn_ ved at by ~dd m,g columns · - n betw een column
· of:tbe commpd1~ ~t
ntin g the dem and of con sum ers A, . Ban~ C respectively. The .relatio !
(2), ,(3)AJ1l(4) .;t:eprese
dem and . sc{1 edu le. W.h .en tbe pric _e is -very high, Rs 6 -per kg, the mar kgforthth1 ket
.(1) •an,d {5) .s~ows the market the dem and increases. When tfle, pr.foe is the lowest,
Re. I per
commodity is 70 kgs. As the pric e fall s, ·,
market demand per week is 360 kg. . . ....
Table 2: Market Demand Schedule
'1
'Quahtity Demanded in kgs . Total
... ·, ,, · .. B . C
.J
Priceper A Demand
kg. (Rs.) (4) = ' (5)
(2) + (JF +
(])
(, 1
_40 70
10 20
6 60 120
5 20 ' ,
~ ~o 170
4· 30 60 80
80 100 220
3
I
40 280
60 100 120
2 360
sb 120 160
I .,

·. 6

, Cl>
0
~ .3
5

1
== D"'
0 40 80 120 160 200 240 28
0 320r, 360
flded
.Quantity .D~'!}a
Fig. 2
-
Demand a11d Law ofDemand: 95

From Table ~ we draw th e .m~~et demand curve in Figure 2. D is the market demand curve which is the
horizontal summation of all the m~ividual demand curves D + D +MD . The market demand for a commodity
depends on all factors that det~nnme an fodiviqual's deman'4d. 8 c
. ~u! a better way of drawing a '!larker demaf!d curve is·to add together sideways (lateral summation) of all
the 1!)d1vidual dem~d ~~~es. In this case, the different quantities demanded by consumers at one price are
represented on each md tvidual demand curve and then a lateral summation is done, as shown in Figure 3.
-~ (A) (B) (C) (0)

! ~~- -~
I
P--~~ p
•-~
I Q
----- I
~p
I
I . DA Q
I II O I
I C

0 A O B O C 0 Q
Quantity.Demanded
• 1 Fig. 3
. Suppose there _are three individu~ls A, B and C in a market who buy OA, OB and OC quantities of the
comm.~d1ty_-at th~ pnce OP, _as s~own m Panels (A), (B) and (C) respectively i!l Figure 3. In the market, OQ
quantity will be b?ught ~h1ch· 1s made up by adding together the quantities OA, OB and OC. The market
demand curve, DM 1s obtained by the lateral summation of the individual demand curves D ,D8 and D in Panel
(D). This figure is not based on Table 2. A c

5. CHANGES I~ DEMAND
I

An individual's demand curve is drawn on the assumption that factors such as prices of other tommodities,
income and tastes influencing his demand remain constant. What happens to·1an individual's demand curve -if
there is a ,change in any one of the factors affecting his ·demand, •the other factors -remaining constant? When
any one, of the1factors changes, the entire <iemand curve shifts. When an individuaJ.'s money income rises,
other factors remaining constant, his.demand curve for a commodity 1will shift u~pwards to the right. He will buy
more 'of the ..commodity at a -given price, as ·shown in, Figure 4. Before the rise _in his income, the consumer is
buying OQ quantity at OP price on the Dp, demand curve. With the increase in income, his demand ·curve
Dp 1 shifts 1to the right as D2D2• He n?w bu~s ~ore qu~tity OQ~at the same pr.ice OP. When _the _co_nsumer buys
more of the commo{iity at a given price, this 1s calle{i increase m_dema1Jd. 1 On the contrary, 1f l;us income falls,
his demand curve will shift to the left. He will buy less of the commodify at the same price, as shown in Figure
5. Before the faH in his income, the consumeds on the demand-curve DPr where he is buying OQrof the
commodity at OP price. He now.buys less quantity OP price_at the given price OP. When the consumer buys less
of the commodity at .a given price, this is. called' decrease m demand. ·•. .
Thus when the demand for a commodity chal]ges due to a change in some other factor (taste, habit,
income, etc.) other than its own 'price, it is called increase or decrease in demand.
Jncrea,se in Demand Decrease in Demand
., D . . D,
2
EOF c%'- ~ IIIJ,14~
\
Q)
BRAR -~)
j
(.)

'&,P
. ·
,~ ~-
~ ..
i '·N-·t -t I 0o~"'-
'-l.,
,! • 1
I
.../ ·"

D,
0 0,--.02· 0 02+--q
Quantity Demanded Quantity Demanded
Fig. .4 Fig. 5
 96 : Microeconomic Theory

A movement along a dema ke lace when there is a

change in the quantity deman_ nd curve ta :Ope in the commodity's
own price. It is called e.xte_
ded du e to a ~~on
gQ in de ma nd. Th is is
nswi or c~~t~ac he n the pri ce
illustr_ated in Figure_ is OP ·, the Extension
quantity demanded ts6 OwQht ,.
ch~- ti~ 1e lu "in price, the
1 re ha s b~ en a p1 1-- -"" """ -
d DD from po int A a> in Demand
downward mov~ment along
to B. This is known as exten t~e s~ de de m r Oc
sion m em an . . n_u; : co•nt:ary ifw e tak e ·.::
0 /
B as the original price-demand . ' OP to a.. P2 1-- ---
p~int
OP leads to a fall in the quant , the n a ns e m the pn ce fr ~ • fh +-~ '--- __ ,;:: i,.. t:-
co~sumer moves up wa rds ity de ma nded fro JdOQ2 to D 1f fro
alo ~
point B to A. This is known ng the sa ~e ~em cu rve 1 1
as contracllon m demand. in Demand
6. TH E LA W O f DE M AN
D
The law of demand expresse .0 01 02
s a relationship between the
demanded and its price. It ma quantity
amount demanded increases
y be defin~d i~ Marshall ~?
wi
:s rd s as ."th e
Qu an tity Demanded
rise in price." Thus it expresse th a fall m pn ce, and dup.m1she~ ~ !th a Fig. 6
s an inverse relation between · .
in which quantity demanded
changes wit~ a ch ~g e in pr~ pn ce an d de m~ ~- Th e law refers to the dtrecti~
demand _curve which is no rm ce. On the fig ~, 1t J S rep~e
based on other things remain all y ne ga tiv e thr ou gh ou t .its_len gth . Th e m~e~se pn
ing equal. This phrase -point
sented by the sl?pe
ce -de ma nd ~elationsh1p_ B
o'.~
this law is based. s tow ard s cer tam im po rta nt
ass um pti on s on wh,~
Its As su m pt io ns
Th ese assumptions are: (i)
income of ,the consumer rem the re is no ch an ge in the tas
ains constant; (iii ) there is tes an d pre fer en ce s of the
should n0t confer -distinction no ch an ge in. cu sto ms ; (iv ) co nsu me r; (ii) tht
on th e consumer; (v) ·there the co mm od ity to be UseQ _
there should not be any _ch should no t be an y sub sti tut
an ge in the prices of oth er es of the commodity; ('11)
change in the ~d ee of the pro du cts ; (vii) the re sh ou ld
pro du ct be ing used; (vi ii) no t be an y possibility ol
p·roduct] and (ix) the habits the re
of .th e consumers should rem sh ou ld no t be an y ch an ge in the quality of tht
Gi\'.en these conditions, the law ain un ch an ge d. .. .
it will sto.p o.perating, of demand operates. If the re .. '
_ is ch ~g e ev en in \~me of the
Explain the law with the help se con d1n ons,
of.Table l and Figure 1
_Ca us es of Do wn wa rd
Sl op in 9 De m an d Cu rv
e
· Why do es a de ma nd cu rve
working of the law ofcdemand slo pe do wn wa rd fro m lef
. Th e following are .the main t to .rig ht? Th e rea so ns fo r thi s als o clarify the,
( l) Th e law of de m~ d reasons for the do wn wa rd
slo pin g demand cl.lf\le,
a co nsu me r buys mo re un!ts is based on th~ law of Dimi~ishing_ ¥a rg ina l Utility.
of a commo_d1ty, the ma rgm Ac co
The_refore, t~~ con~umer ~t
ll buy mo re umts of !ha t co al uti lity of tha t co mm od ityrdi ng to this law, w~en
available, ut1h~ will be high_ mm co nti nu es to d~chne.
~d the c~nsumer _will_ be pre odity on ly wh en its pri ce falls. W he n less umts ~
the demand will be mo re at pared to l?ay mo re for the co
downw~Q ,sl.o.,ei ng . a low er pn ce and 1t will be mm od ity . Th is proves th~
less at a hig he r pri ce. Th at
· is wh y the demand cu1"e
· (2) E'vefY~G.Q_mmodity ha s
as a result flem ~ d 'i~creases certain consumers bu t wh . -~
. On the contrary, with the inc en its pri ce falls ne w co ns um ers sta rt consuming~~ \
either re~uce or, s_toP, its co rease in the pri ce 'or the pro
ns du ct ma ny consumers win,
consumers~con~Jm e ,m_or~ or u~ pti on an d the d~mand wi ll be red uc e~ . Th us , du
less of th~ commodity, the e to 'th e pr ice effect whe 1\
(3) 'Yben ~the.· pn ce of .a co ~e ma nd cu rve· slo pe s do wn
~pend less m. ~rder to buy.t he mm od 1~ fal ls, the real mc
wa rd: ~
S'l ~e 9uant1ty. On ~he contra om e of the co ns um er inc rea ses because he ha5rea\
mcom~ of the conslJmer [all$. ry, wi th t_h e:r ise_in-the pri ce
of
the pn ce of the comm_o~1ty Th is ts called the income effect. Un de r the mf lue nc e of the commodity, the in
~uymg 0th the _consumer buys more of
it an d also sp en ds a po rti on thi s eff ect , with the faIIein
~r ~ommoditles. For mstance, of the increased
wi th the fall in the price of mi
time,_ he will m~rease the dema
n~ for oth er lk, he wi ll bu y mo re of it bu incont5 1
commod t at the
he will reduce its
the demand curvedem and. Th e mcome. effect of a ities. On the oth er ha nd , wi th the inc rea se in the price ~1
slopes downward_. ch an ge in tbe pri ce of an ord ina ry co of.~ve, ,
. _ • · mm od ity being p0511 ·
(4) Th e other effect of change
pri.ce o f a commo d"tty, th e pn. m the pn ce of the commod . tJll
ce s o f.its su bst1. tutes remam . . ity is the s-u bs t ·,ut •
mg the same, co nsu me rs' wiwn e» ec1. ; w·t th the fall t1OU
,n, 11_,1iO
ll bu y mo re of this com 0 .
rather than the substitutes. As a result Demand and Law of Demand: 97
its d .· .
com!11odity (~nder considerat~orr) its
fall !n the pr!ce oft e~ the pnce_ of cof dema::Wai;~ ; 111 1~crease. On_ the con
trary, with the rise in, the price of
the increase 10 the Pi:tce. oft ~~ its demfee bein un~~, given the pn_ces of the substitutes. For instance, with the
(5) There are persons m differentand wi lffall anged, th e demand for tea the
in will rise, and contrariwise, with
The do~ nward sl_op·m~ demand ._cu come groups m
· . '·
and less when pnce nses. The nch rve dep end s u on .every society · b
. ut the ,majority is in low ome gro
th1 s group.
buying the same quan~i~ even at a
do not h P Ordinary people buy more whinc up.
en price falls
higher p~~:. any effect on the _del!land
(6) :J'here· are different use of cer curve because they are capable of
sfope of the demand ~urve. Withsthe tain .. . ·
increasecf~~odit~es and services tha ·
impo1't8:11t uses ~d ~hei~ deman~ wil t are responsible for the negative
and their d~m~d ~ti t nse. For instan l fall . On the ·co :tin ce ~f such pro.duct~, they wil~
for domestic hghtmg, but if the cha ce, with the i ary,_ with the ~a~I _m pnce, they willhebeused. orily for more
rges are redu nc~ease 10 the _elec~nc1ty put to various uses
. . • . cha rge s, pow er wil l be used primarily
ex ce pti on s to th e _ ce , peop1e wdl use power for cookin
L aw .of De ma nd g, fans, heaters, etc.
· ·
In certain cases, the ·cterh.a:nd curve
i.e., t as ahpo~1·r
· ·t h slop es up
t_h1ve s_tope u der cert~in circumstanom Ie to nght·
fr ft .
buy more w. _en . . ~ price o.f ancom ces, consumer~
modity rises and l h ·
falls, as shown by ~he D curve in Fig
to an .upward slopmg demand curve. ure 7. Ma ny cau se~ s!r: a:~i6~c~
ue D
(i) Wa,: If shortage is feared in anticip
· l'. b 'ld' ation
s!art buym g ,or u1 mg stocks or for hoardin of war, peop le may . a>
nses. · g even when the rice ·;::0
(ii) . De pre ssi on. Du rin g a P a.
~ommodities are very low and the_ dep res sio n, the prices of
1s because Qf the laok of purchasindemand for them· is also less. This
g power with consumers.
. (1~i) Giffen Para_dox. . If~ -~ommo
ofhfe hke wh~at ~and its pnce·:goes up, dity happens to be a pecessity
the C(?nsumptton of mo fe expen~ive G.Qn~uIJlers~ar~ -for~ed to curtail
wheat being still the cheapest food foods like meat and fish and· O . . Quantity Demanded·
Marsh~llian example is applicablethey wil t consume more it. The
to
of Fig. 7
c~e .of an 1mder~eveloped economy, developed economies. It the . ·
wtll start consummg·more of the sup ~ith the fall ~in ~h~ price of an inferior commodity•like maize, consum·
is \_\'hat Marshall called the Giffen Par erior commodity hke wheat. As a resu ers
lt, the demand for maize will fall. Thi
· . -(iv) pem ons fra tio n Effect. If con ado x which mal(es the demand curve to hav s
sum ers are affected by the principle of e a-p ositive slope:
demonstration effect, they will like to
when their prices rise. :c;>n the ot~er buy ·mo re of those commodities which confer.conspicuous consump.tion or
hand, with the fall in the prices of suc distinction on the pos~essor,
case with diamonds. · h arti cles , their deID:and fails, as·is the
. . (v) Ignorance Eff~ct. Consume · · · -. · . ·•
where a commodity may be ·mjstakenrs buy more at a higher pr!ce under the infl~ence of _the "ignorance -eff ·
for some other commodtty, ·due to dec ect",
(vi) Sp~culation. Marshall menti?ns eptive p1;1c~ng, .label,._ etc.
sloping de~and curve. According t~ ~peculation ·as one of the important
exc
between group-s of speeula:tors. Wh • him , the law of dem ~d does :not apply. to theeptions ~o !he downw~d
en· demand m,a campai_
falls and ·the other group .begins .buyin a _group un~oads ·a ~eat quan~•ty of a'thm~ on. to the marke', the pncgn
g 1t. When i! has raised the pnce of e
deal quietly. Thus when price rises, the thmg, 1t arranges to sell ~ great .
1 • • ,,, •
demand also mcreases .
' ::· - ~
•

7.-INCOME DEMAND •

We have so far . studi~d price dem

study' income dem and which indica and in its _v~rio~s aspects, k~eping other t~i11gs 'co~stant. Let us n~w
demanded. It relates to the various quates_the:.relc1,t1onsh1p :be~w~e~ ~nc.ome ·a~d. ~O~-qu~:n!tty~~f .~ommod!
ty
various levels of income in a given,. ntities of a commod1~ or s~rv1ce that wi~l be bought by the co~sumer
period of time, other thmgs bemg equ ~t
equal are the price of thetcopimodity al.
in -question,- the prices of related com Thi~gs that -are assumed to remam
and habits of the consumer for it. -Th mod~1es! and_ tbe ·~t es, _!)references
e
income-demand relationship is usually income-demand· function for a com!110?1ty •.s· wn~~n as D_ - f (r). l.he
·and decreases with the fall· in iRcom direct. The demand for the C?mmodt~ increases Wl ~ the nse mJ~co;Q
and when income rrses to 01 ·the e, as s~own in Figure 8. \_\'hen mcome 1s 0!,
the quantity demande ~~~ be
quantity demanded also mcreases
1 to OQ r The reverse case can ·

L
 I
98 :-Microeconomic'Theor
y
. (A) (8)
~·shown likewise. ~~ th e income demand
s,
curve JD has a post ,v slope : Bu t this sl~pe ID
e oods. ,
is in the case· of n~ rm
Let us take t e c . ..
~; of a consumer who -- -- -- -- -- -- -- - 03
is in' the habit ~f c_onsu n in ferior good.
mm~:mains be lo w a
So lo ng as hi s m~o
m~ imum subsistence
-- -- -- -- -- -- -- - Q
particular le~el of h : ,
, m :o re of this inferio
he will coptmue t~ h ~y r /1 -- -- -- -- -- -- --
·ihcome increases by - QI
goods- even w~en IS
small increments. Bu en ' hi s 'income' starts
rising above that level,t wh duces his demand I
he_Te . 8 (B) 01 is the
for the inferior good. ~n
minimum ·subsistence Ft ~r e · ome where Q
leve~ ofJn~-0 this level, Q2 0
he buys IQ o~ th ~ co m 0 Q
m ;:~ rg oJ d for him so ua nt ity D em an de d
this commodity •~ a no
· ti"
h th
t a e'·ncreases its nsump on from IQ to Fig. 8
hen hico
s l
I,Q, to /J, Qb7 .d t O f. Ase hirissesin.gradual_.Y
in co m
he sta
·
from _ (!1 to . \ an ~ bJys / Q come nses above, 0/1.fh . th e cayiseng le ss o~ th e co m m o d"t.ty. For ms
rts bu .
at 0/ 1pcome
3
1
teve , e . 3 3
w hi ch is les s than I 2Q2 • us , 10 of in fe no r go od s, the mcomed~~
curve ID is backward
slopmg.
s. CROSS D E M A N D
Let. us now take th e (A) (8)
case of r~/ated
oods arid how the chan
~ne :affects the deman ge in th e pnc~ ~f
d· of
known as cross deman the ?ther.. This ts <(
Substitute CD
d
D=j(prJ. - Related -~ood and i_s w nt te n as Goods
s ~are· of ~ o types, o A1·
I
substitutes and complem ~ A1 __ __ _. __ __ I
ent-ary; In the_ c~ e .;. __
I
of substitute or competi
tive goods, a ns e m · ·;:: I I
I
the price of ·one good · a..
for1he other~good B; th
A r~ se s th e de ~~ nd A -- -- -- _
I A -----~~+----- I

the same. The..o-ppo-sit

e· pn ce or B remammg I. •I
e,hol I. I co
a fall in the price of ~ wh ds m the case of I I
falls . .Figure· 9 (A) ill en the ~emand for B
I I
I
ustrates 1t. When the I I I
I
·price of gooq A increa
the ·quantity of good ses fr~m OA_to OA i O 8 0
.B ·also mcreases from 8, .Q ua nt ity of B B
OB to OB . The cro~s de
mand curve CD ~or .
substitute~ -is• positivel
the rise in -the price of y slo pi ng . For wi~h . · Fi g. 8
:-4.;. th . ·
is -also ,assumed here 'th e •copsumers w1ll .sh1ft th~tr demand to -B , . . . chang~
at ,th eiinc0111es, :tastes, sm ce th e pn ce of B
In case the' two.goods. prefe~ences; etc. ,o f th remains un .
are complementary or e__con_sumers ~o no t
a fail in the demand fo Jo m tly demanded, a T1se -m .th chan ged A will~
r go
in Figure 9 (B) where wh od B. Conversely, a fall in the·pric.e of A will e. pn ce of on e go~ .
·nus~
.en ,raise th e ,de_m an d fo r
demand curve in the ca 1tbe price of A falls from OA to OA, th e de B. Thi~~~ oB /
se of complementary 1 Jl!and _fo r B in cr ea se
lf, however, the tw goods is negatively ,sl s from O curvt·
op in g lik e th e qr di na
for B. We seldom study o goods are independent, a change iri th e ry demandthe de~
the -relation between tw price
· we are concerned wi o unrelated goods lik of A .w ill ha ve no effect on onsl
th the price-demand e w he at an d ·ch ai rs .
. relafion of substitutes Mostly ·as c
.
;~ . an d co m pl em en ta ry
·.9 . SHORT-=RUN'(A .. . go od s.
N.D' l:ON-G~'I\UN-·I -
' JEMAND CURVE S
- Di~~nction ·may. be · · .
co'!lrnod1t1es such as ve m ad e be ~e en sh or t-r un an d
lo ng • ,. .~111
rtS
ge -r un de m
quickly. F~r such comm ~'?les, fruit,_ milk~ etc., th e ,change in quan an d cu rv es . In th e case. of ~~lli
od1t1es, there 1s a sm tit
. B~t m t~e cas_e of gle -demand curve with y de m an de d. to a change 10 P
:f durable commoditie~ su
~ot ha v~ ts u\timat: ef
,c may e a ong tim fect on the quantity,demanded until .the
th e
ch as . gadgets, machine us ua l ne ga tiv e slope.
s~ cl ot he s an d others jor,
, a c~an~e edi~
,

e. A short.:.run deman ex is tin g st oc k of th e

d curve shows th e ch an commoditY 15c~~
ge in .q ua nt ity deman
ded to a