The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time. In a typical representation, the price will appear on the left vertical axis, the quantity demanded on the horizontal axis….

Environmental stressors are stimuli in our environment that cause stress. Some common environmental stressors are war, temperature, noise and crowds. So the next time you find yourself feeling overwhelmed, look at your surroundings to see if you can pinpoint any stressors….

Demand is an economic principle referring to a consumer’s desire to purchase goods and services and willingness to pay a price for a specific good or service. Holding all other factors constant, an increase in the price of a good or service will decrease the quantity demanded, and vice versa.

The demand can be classified on the following basis: Individual Demand and Market Demand: The individual demand refers to the demand for goods and services by the single consumer, whereas the market demand is the demand for a product by all the consumers who buy that product.

If the amount bought changes a lot when the price does, then it’s called elastic demand. An example of this is ice cream. You can easily get a different dessert if the price rises too high. If the quantity doesn’t change much when the price does, that’s called inelastic demand.

Demand function shows the functional relationship between Quantity demanded for a commodity and its various Determinants. The quantity demanded is inversely related to price of the products, i.e., if prices fall, the demand will increase….

Types of demand

• Joint demand.
• Composite demand.
• Short-run and long-run demand.
• Price demand.
• Income demand.
• Competitive demand.
• Direct and derived demand.

In its standard form a linear demand equation is Q = a – bP. That is, quantity demanded is a function of price. The inverse demand equation, or price equation, treats price as a function f of quantity demanded: P = f(Q). To compute the inverse demand equation, simply solve for P from the demand equation.

Supply and demand, in economics, relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy. It is the main model of price determination used in economic theory.

In 1890, Alfred Marshall’s Principles of Economics developed a supply-and-demand curve that is still used to demonstrate the point at which the market is in equilibrium. In theory, people buy less of a particular product if the price increases, but Marshall noted that in real life, this behavior was not always true….

Which Comes First: Supply or Demand? Does a producer develop a product or service and then develop a market for it among buyers, or does a demand for a product or service arise among consumers and then producers respond by making goods that meet that demand? The answer is yes; it can happen both ways.

While an increased supply may satiate available demand at a set price, prices may fall if supply continues to grow. But if supply decreases, prices may increase. Supply and demand have an important relationship because together they determine the prices of most goods and services.

When demand exceeds supply, prices tend to rise. If there is an increase in supply for goods and services while demand remains the same, prices tend to fall to a lower equilibrium price and a higher equilibrium quantity of goods and services….

Factors Affecting Demand

• Price of the Product. There is an inverse (negative) relationship between the price of a product and the amount of that product consumers are willing and able to buy.
• The Consumer’s Income.
• The Price of Related Goods.
• The Tastes and Preferences of Consumers.
• The Consumer’s Expectations.
• The Number of Consumers in the Market.

If demand increases and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price. If demand decreases and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price. If demand remains unchanged and supply increases, a surplus occurs, leading to a lower equilibrium price.

Figure 4.13(b) shows the effects of a decrease in both demand and supply. A decrease in demand shifts the demand curve leftward and a decrease in supply shifts the supply curve leftward.