Ch 3Theory of Demand — Class 11 Economics, concept-first.

Every Andhra Pradesh Intermediate first-year Economics student begins the study of microeconomics with this chapter, because 'demand' is used far more precisely in economics than in everyday speech.

A demand schedule is a table that lists the various quantities of a commodity that a buyer is willing and able to purchase at different prices, over a given period, other things remaining constant.

The Law of Demand states that, other things remaining constant (ceteris paribus), the quantity demanded of a commodity is inversely related to its price — as price rises, quantity demanded falls, and…

A few situations are genuine departures from the Law of Demand, where quantity demanded moves in the same direction as price instead of the opposite direction.

The Law of Demand only tells us the direction in which quantity demanded moves when price changes; it says nothing about how much.

Three methods are commonly used in Intermediate Economics to actually compute price elasticity of demand.

Income elasticity of demand () measures the responsiveness of quantity demanded to a change in the consumer's income, prices remaining constant:

Cross elasticity of demand () measures how the quantity demanded of one good () responds to a change in the price of a related good (), the price of itself remaining constant:

Several factors decide how elastic or inelastic the demand for a particular commodity turns out to be:

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