1. DA COLLEGE FOR WOMEN PHASE VIII SAIMA NASIR DEPARTMENT OF ECONOMICS

2. DEMAND AND SUPPLY DEMAND AND SUPPLY

3. TABLE OF CONTENTS Law of Demand Law of supply Equilibrium Price Change in Demand Change in Quantity Demanded Elastic and Inelastic Demand

4. Law of Demand Price & Quantity Demanded: The Law of Demand Law of Demand: – negative, or inverse relationship – movement along demand curve – change in quantity demanded

5. Law of Supply Price & Quantity Supplied: The Law of Supply Law of Supply: – positive relationship – movement along supply curve – change in quantity supplied

6. Market Equilibrium Quantity supplied = Quantity demanded (No tendency for the market price to change ) Quantity supplied > Quantity demanded (Excess supply or surplus) Equilibrium quantity Equilibrium price Equilibrium point

7. Graphs Showing Change in Quantity Demanded Quantity of X demanded, Q d X = f (P X ; P Y, I, preference, and others) Demand function (equation): Factor effecting demand Factor effecting quantity demanded

8. Change in Demand and Change in Quantity Demanded Change in Quantity Demanded occur when there is change in price only, keeping all the other factor constant Change in Demand occur when price remains constant while other factors change.Such as income, preferences, taste, season, price of other related goods

9. ELASTIC AND INELASTIC DEMAND The flatter curve D 1 shows an elastic demand while the steeper curve D 2 shows an inelastic demand The elastic demand shows a greater relative change in quantity demanded with respect to change in price while an inelastic demand shows a lesser relative change in quantity demanded with respect to change in price

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