Concept of Demand Schedule:
Let’s take for eg., I usually need 1 kg. of tomatoes for cooking everyday. I prefer keeping a stock of 5 kg tomatoes for 5 days. Recently, the price of the tomatoes are fluctuating too much. So, I plan to make a visit to the grocery store everyday. One day I got tomatoes at 65 Rs. /per kg. I bought 2 Kgs. The other day I got them for 80 Rs. / Per Kg. I only bought 500 gms. The next I bought 3 kgs for 55 Rs. / per Kg. If I had to summarise my total demand for tomatoes for the past three days in form of a table, it will be as follows:
|Days||Price / Kg||Quantity Demanded|
The above tabular description of the demand at different prices by an individual is known as the demand schedule. The relationship between price and quantity demanded reflected in this schedule assumes the following factors remaining constant:
- Tastes and preferences of the customers
- Price of the Related products (Substitute or Complimentary)
- Income of the Buyer
The Demand Curve:
Give the below situation to the class
Let’s assume the whole class is taken on a field trip to a chocolate factory. The rules of the chocolate factory are as follows:
The factory has more than 50 varieties of chocolates available. But, you can only buy one variety of chocolate at a time and you have to spend a minimum of Rs. 500 as a cover charge to join the exhibition group of the chocolate factory who will be shown how each variety of chocolate is produced.
All the students bought chocolates worth Rs. 500 and data from few students were collected as follows:
|Student||Chocolate Variety||Price per unit||No. of Units bought|
Ask the students to put the above data in the graphical form.
Put Price on the “Y” axis and No. of units bought on the “X” axis.
Explain them the graph which is downward sloping curve from left to right.
The graph that we have got is the true shape of demand curve which is downward sloping from left to right. We get this shape of the demand curve because when the Price increases, the demand decreases and vice – versa. Here, the most important consideration is that the other determinants of the demand are assumed to be constant.
Concept of Market Demand:
Call three volunteer students in front. Name them A, B, C. Ask them to write on the board the number of muffins each one of them would like to buy from a grocery store. The price of each muffin is Rs. 20. Let’s Assume A wants 5 muffins, B wants 6 muffins and C wants 4 muffins. Calculate the total demand of that store for the muffins at Rs. 20 by adding up the individual demands of A, B and C
qD (A) + qD (B) + qD (C)
i.e., 5 + 6 + 4 = 15 muffins.
Now, Introduce the concept of Market demand to the students by giving them the definition below:
The market demand is the summation of the individual quantities that consumers are willing to purchase at a given price.
Give them some practice worksheets from the worksheet column to make them practice Market Demand calculation.