23331465 law-of-demand-and-equi-marginal-utility

Law Of Demand Theory And Equi-marginal Utility Approach Presented by: Adrita Nath Ashwini Kumar Rohit Kishore Shritama Sarkar Upasana Roy Varun Kalra

Contents ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Contd… ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Why Demand ? SATISFACTION NEED WANTS DEMAND PURCHASE

What is Demand ? ,[object Object],[object Object],[object Object]

Determinants of Demand ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Law of Demand ,[object Object],[object Object],[object Object]

Demand Schedule (Hypothetical) 100 200 300 400 500 5 4 3 2 1 Quantity demanded (unit per week) Price of commodity (in Rs)

Quantity demanded (Q) Q 1 Q 2 P 1 P 2 E 1 E 2 0 D D Price(P) P 1 - old price P 2 - new price Q 1 – old quantity demanded Q 2 – new quantity demanded DD – demand curve A Linear Demand Curve Demand Curve

Characteristics of A Typical Demand Curve ,[object Object],[object Object],[object Object],[object Object]

Assumptions (Other things) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Contd… ,[object Object],[object Object],[object Object]

Exceptions To The Law ,[object Object],[object Object],[object Object],[object Object],Q 1 Q 2 P 1 P 2 Quantity demanded Price Upward sloping demand curve D D

[object Object],[object Object],Movement along the curve OR Change in quantity demanded P 1 P 2 Q 1 Q 2 E E` D D Quantity demanded Price

[object Object],[object Object],Quantity demanded P 2 Q 2 P 1 Q 1 E E` Price

Movement of Demand Curve OR Change in demand ,[object Object],[object Object],[object Object],P 1 Q 1 Q 2 a b D D D` D` Q 1 P 1 P 2 D D D` D` a b Quantity demanded Quantity demanded Price Price

[object Object],[object Object],[object Object],Q 2 Q 1 P 1 a b Q 1 Quantity demanded P 1 D` b D` D D D` D D a D` Price Price Quantity demanded P 2

Factors And Effects of Change (increase or decrease) in demand ,[object Object],Quantity demanded Price Increase Quantity demanded Price Decrease D` D` D D D D D` D`

[object Object],D D D` D` D D D` D` Quantity demanded Price Quantity demanded Price Positive Negative

[object Object],D D D` D` D D D` D` Quantity demanded Quantity demanded Price Price Favorable Unfavorable

[object Object],Quantity demanded Quantity demanded Price Price D` D` D` D` D D D D Fiscal measures (welfare) Fiscal measures (particular)

[object Object],D` D` D` D` D D D D Quantity demanded Quantity demanded Price Price Increase in price of substitute goods Decrease in price of substitute goods P tea D tea : P coffee D coffee P tea D tea : P coffee D coffee

[object Object],Quantity demanded Quantity demanded Price Price D` D` D` D` D D D D P car D car : P petrol D petrol P car D car : P petrol D petrol Decrease in price Increase in price

[object Object],Quantity demanded Quantity demanded Price Price D` D` D` D` D D D D Increase Decrease

[object Object],Quantity demanded Quantity demanded Price Price D D D D D` D` D` D` Aggressive Docile

[object Object],Quantity demanded Quantity demanded Price Price D` D` D` D` D D D D Deflationary Inflationary ( Value of money ) ( Value of money )

[object Object],Quantity demanded Quantity demanded D D` D` D` D D` D D Low High Price Price

[object Object],Quantity demanded Quantity demanded D` D` D` D` D D D D Rise Fall Price Price

Law of Equi marginal Utility ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Utility Schedule - 9 7 5 3 1 -1 -3 0 9 16 21 24 25 24 21 0 1 2 3 4 5 6 7 MUn= (∆TUn / ∆Qn) TUn Units of goods (n)

About The Law ,[object Object],[object Object],[object Object],[object Object]

Assumptions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Example ,[object Object],50 48 46 44 42 40 38 100 90 80 70 60 50 40 120 100 80 60 40 20 0 1 2 3 4 5 6 7 MU C P =Rs 2/unit MU B P =Rs3/unit MU A P =Rs5/unit Units

[object Object],[object Object],[object Object],[object Object],[object Object]

Equi marginal Utility And Law of Demand ,[object Object],Income constant If price x fall Real income increased MUx fall Demand X increased

[object Object],Price constant Income increased Money income rise Demand rises In case of normal goods +ve I.E + S.E = Law of demand

Use for managerial purposes ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

23331465 law-of-demand-and-equi-marginal-utility

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