Say's Law of Market

Lecture Series on Economics by Prof. Vinod Kumar.

Continue reading »

What is Elasticity of Demand ? Explain its Degrees and Different Methods of Measuring it .

Definition of Elasticity of demand


Elasticity of demand may be defined as percentage changes in demand divided by percentage changes in prices . This is the simple measurement of the changes in the value of demand , if any changes happens in prices . Suppose if Ram purchased fruit 10 kgs at Rs. 5 per kg . If the price of fruit increase by Rs. 1 and demand of Ram decreases by 8 kgs it means demand of Ram is more elastic and its value can be found by elasticity of demand formula

Continue reading »

Learn Law of demand with Video

I have already explain the law of demand but if you are interested to learn law of demand via video , you can learn below .

Continue reading »

Simple Explanation of Increase and decrease of demand for beginners of economics by Video

Prof. Richard McKenzie explains very simple way the increase and decrease of demand in following video . He said that if price will same and demand will rise right side it will be increase in demand and if price will same and demand will shift left side in graph this will be decrease in demand . The main reason beyond are changing the assumptions of demand , means income , taste and habit of buyer will change , then it may happen increase and decrease in demand . You will also watch it .

Continue reading »

Why is demand curve's slop downwards or negative ?

There are following reasons of negative or downward sloping of demand curve

Ist Reason

Effect of law of diminishing marginal utility

Main reason of negative slop of demand curve is the effect of diminishing marginal utility . According to this law , the consumer will consume one more unit at less price because according to this law , next unit will give him less marginal utility and he will not interested to pay high for low utility product . So , according to this law , if prices decreases the demand will increase and slop of demand curve will be downward .

2st Reason

Effect of Income

when a buyer purchase goods at a certain price , if the price of this product will decrease , at that time buyer's real income will increase . He will capable to buy more . So , after decreasing of prices , buyer will buy more goods and trend of demand will increase . This is due to income changing effect and slop of demand curve will be downward .

3rd Reason

More Usages

If the price of any product will decrease , the buyers can also these products for other uses . Suppose , if the price of potato is $ 5 , I will use for only as my food , if the price of potato is $ 0.10 , I will use it for my pet cows and also other animals . So , for more usages , demand of product will increase and slop of demand curve will decreases .

4th Reason

Now buyers

One the price of any product decrease , new buyers who can not buy this product due to high price , they will also buy this and the demand of this product will increase and it will negative the slop of demand curve . This the simple reason why demand curve's slop downward .

Continue reading »

Demand and law of demand

Definition of Demand

Demand may be defined as the quantity which are wanted by buyers and they are willing to buy and also have capability to buy. It means , it is the total quantity of purchase by customers . Because demands must have following conditions .

1. One buyer wants to buy .

2. one buyer is willing to buy .

3. He has capability to buy . It means he has money to buy that product . If he want to buy but he has no money , then this want is not demand but it is just need .

Law of Demand

There are so many factors which affects demand , if all other things remain constant and if price will increase , there will decrease in demand . But if price will decrease , then demand will increase . This rule is called law of demand .

Assumption of demand

1. Income of consumer remains constant .


2. Taste of consumer remains unchanged .


3. Govt. policies remain same.

Graphically presentation of Law of demand under demand curve :-

If we present demand curve under law of demand then we found that DD demand curve's slop must be downward or negative . You are seeing that price on oy and demand of quantity is on ox and when you make graph it will increasing downward in right side . It means if price increases , demand decreases and if prices decrease , demands increase .

Continue reading »