Demand Function In Economics

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Demand function :-

Demand function shows the relationship between quantity demanded for a particular commodity and the factors influencing it. It can be either with respect to one consumer (individual demand function) or to al the consumers in the market (market demand function).




Individual Demand function:-

Individual demand function refers to the functional relationship between individual demand and the factor affecting individual demand.

It is expressed as

Dx = f (Px, Pr, Y, T, F)

Where

Dx = Demand for commodity x

Px = Price of the given commodity x,

Pr = Prices of related Goods

y = Income of the consumer

T = Tastes and Preferences

F = Expectation of change in price in future.




Market demand function :-

Market demand function refers to the functional relationship between market demand and the factors affecting market demand. Market demand function can be expressed as

Dx = Market demand of commodity x,

Px = Price of given commodity x,

Pr = Prices of related goods;

y = Income of the consumers;

T = Tastes and Preferences,

F = Expectation of change in price in future;

Po = Size and composition of population;

S = Season and weather;

D = Distribution of Income.

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