Ch 2Demand Analysis — Class 12 Business Economics, concept-first.

In everyday speech "demand" simply means a desire for something. In business economics the word is far stricter.

A demand schedule is a table showing the different quantities of a commodity a buyer will purchase at different prices, other things remaining constant. It comes in two forms.

The Law of Demand states that, other things remaining equal, the quantity demanded of a commodity varies inversely with its price — as price falls quantity demanded rises, and as price rises quantity…

A common and important confusion in demand analysis is between a movement along a demand curve and a shift of the whole demand curve. The distinction turns on which determinant has changed.

The Law of Demand tells us that a fall in price raises quantity demanded, but not by how much. Two goods may both obey the law yet respond very differently — a small price cut may raise the sales of o…

The most direct way to measure price elasticity is the percentage method, also called the proportionate or ratio method. It applies the definition straight away:

When elasticity is to be measured at a particular point on a straight-line demand curve, the geometric method (point method) is used.

Elasticity is not merely a classroom measure; it is a working tool that managers, sellers and governments use every day.

Sample papers and previous-year board questions for this subject.