Demand Schedule:
A demand schedule is a list of prices and demand. It explains the relationship between two variables, price, and quantity. it can be presented as follows:Price per kg | Quantity Demanded |
Rs. 10 | 10 kg |
Rs. 8 | 20 kg |
Rs. 6 | 30 kg |
Rs. 4 | 40 kg |
Rs. 2 | 50 kg |
Initially, when the price of a good is Rs.10 per kg, the quantity demanded by the consumer is 10 kg.
As the price decrease from Rs.10 per kg to Rs.8 per kg and then to Rs.6 per kg, quantity demanded by the consumer increases from 10 kg to 20 kg and then to 30 kg respectively and so on.
Demand Curve:
The geometrical/ graphical representation of the demand schedule is a demand curve. it can be presented as follows:
In the above figure, price and quantity demanded are measured along the y-axis and x-axis respectively. By plotting various combinations of price and quantity demanded, we get a demand curve DD1 derived from points A, B, C, D, and E.
Demand Equation/ Demand Function:
Demand is also a functional concept. So, it can be expressed algebraically in the form of an equation or function. There are two types of the demand function, which are as follows:a) Simple demand function: The demand function showing simple relation is expressed in functional form as;
QD = 𝑓(p)
Where,
QD = Quantity demanded and
P = price.
The above equation means that demand depends upon price.
b) Multiple demand function:
Multiple demand function refers to the functional relationship between demand and all the factors affecting demand. It is expressed as:
QDx = 𝑓 (Px, Pr, Y, T, E, Py)
Where,
QDx = Quantity Demanded for Commodity X;
Px = Price of the given Commodity X;
Pr = Prices of Related Goods;
Y = Income of the Consumer;
T = Tastes and Preferences;
E = Expectation of Change in Price in future;
Py = price of commodity Y
The above equation states that demand for commodity X will depend on the above-listed variables.
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