Variable, Supply and

Demand @Determinants
of Demand
BY
T MANOJ
T PAVA N K U M A R
T S O M N AT H
Variable
Anything subjected to change

In economic sense: any Quantity, value, price, rate of change by self or due to change in

determinants .

Interrelated and interdependent

Demand Supply Sales

Price Cost Revenue

Profit Capital Labour

Kinds of Variables
Dependent and independent

Endogenous and exogenous

 Petrol Model

Independent variable Dependent variable

Exogenous variable Endogenous variable

Demand
It’s a want/need/desire backed by the willingness and ability to buy a particular commodity in a

given period of time.

It’s the quantity of commodity, customers are willing to buy at a price and time.
Types
Direct and Derived Demand
Recurring and Replacement Demand
Complementary and Competing Demand
Consumer and Capital goods Demand
Perishable and Durable goods Demand
Individual and Market Demand
Determinants
Growth of
Population Price of Product
Economy

Consumers Determinants Income of

Expectation of Demand Consumer

Taste and Price of Related

Advertising
Preferences goods
Supply
Definition :
Quantity of goods/services, a seller is willing and able to sell at a particular price and
time.

Law of Supply:
Higher the Price, Higher will be the Supply.
 Price of the Cost of the
commodity production

Government Determinants of
Policies supply

State of Technology

Number of Firms
Supply Function
The relation between supply and its determinants

Sx = (Px, C, T, G, N)

Supply
No. of Firms
Cost
Govt.
Price technology Policies
Supply schedule
List of the different combination of price and quantity of commodity supplied.
Eg.

Price Quantity
10 15
15 20
20 25
Supply curve
Graphical representation of supply schedule.
Linear or
Curvilinear

Price
15

10

0 1 20 30 Quantity
5
Shift in supply curve
A2 A
A1

Price
15

10

0 1 20 30 Quantity
5
Equilibrium
Balance between supply and Demand

Supply

Price
15

10
Demand

0 1 20 30 Quantity
5
Thank you