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I heartily welcome you to read this post on Concepts of "Demand". Let s start from the term demand.

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Demand

Generally demand refers to a common desire. But here in Economics Demand refers to a desire which is formed or backed up by the willingness and ability to pay sum of the of money for some quantity of goods. simple, Demand is a desire which can be caused by ability to pay and willingness to purchase.

Demand schedule

As we've discussed in Indifference schedule, Demand schedule is also a data in tabular form or tabulation which shows the functional relationship (Mathematical) between the quantity of goods/commodities demanded and their prices. The demand schedule is again categorised into:

Individual demand schedule: It is the number of purchases which are made by an individual with given income (total purchases with his income).
Market demand schedule: It is a data which shows total number of goods purchased by different individuals at different prices in a market at a period of time. (Total purchases by n number of individuals in a market).

It is the basis to draw and explain demand of the goods with their prices in graphical way of presentation of the data.

Individual demand schedule

It explains the functional relationship between different quantity of goods and their prices which are purchased by a single person (Consumer) in the market It is called as individual demand schedule.

Market demand schedule

It shows the total demand for a group of commodities in different prices which are demanded by consumer for over a period of time in the market. It is called as market demand schedule.

Demand function

Demand function shows the functional relationship between Quantity demanded and at various factors which influence or determine the total demand.

It can be expressed mathematically as:

Dx = f(px,psc,y,t,T,w,Psize,s.b)

Where,

dx = Demand of x commodity,
f = Functional relationship
px = Price of x commodity
psc = Price of substitution and complementary
y = Income of consumer.
t = Tastes
T = Technology
w = weather condition
psize = population size
s.b = state of business.

Giffen Goods or Giffen's paradox

A Giffen good is a non luxury good where the demand increases with the rise of the price of that good. It is one of the exception to the law of demand where the demand diminishes with the increase in price and vice versa.

Veblen goods or prestigious goods

This concept is highly associated with the name sir T Veblen's theory of Leisure Class. Veblen goods are those goods which are costly and well-designed such as, costly cars, diamonds, etc. Generally only rich people or high class people purchases these kind of goods for keeping their prestige and position in the society. As price increases, they purchase more of that goods and once if the prices of those goods decreases, The demand for those goods also decreases which is not applicable to the law of demand.

Speculation

It is a wrong statement that says if the prices of any goods/commodities rises, They purchase more because of having a thought that the prices will rise more in the future. In this case the demand increases with the rising price which is also an exception for the law of demand. In the same way, if the prices or value decreases the demand also decreases. (Example, Shares).

Price demand

It explains the functional relationship between the price of the good and quantity demanded when other things/factors remains constant and same. Price demand always shows negative relation (Inverse) between price and demand.

D x = f(px) where D x = Demand for X commodity and P(x) = price of X commodity.

Income demand

It shows the direct relationship between the number of goods demanded and income of the consumer when other things remains constant. There is always positive and direct relation between demand and income for superior goods and there is inverse relationship between demand and income for inferior goods. A consumer can buy quality and high model goods when he has more income.

Dx = f(y). Dx = demand for x commodity and F(y) is the functional relationship with income of the consumer.

Cross demand

It refers to the relationship between any 2 goods which are either complementary or substitute to each other at different prices. It is the effect of a demand for 1 good with the changes of other good.

D x = F(p y)

Substitutes

It refers to those goods which have the utility or ability to satisfy same want of a consumer. for example, tea and coffee. Tea is always a substitute for coffee. Google search engine is the substitute for Bing search engine. The relation between these goods is positive in the nature.

Complementary or complementary goods

These are goods which can satisfy the want jointly. For example, Shoes & Sox, Cars and petrol etc... The relationship between complementary goods is inverse (negative). If demand for 1 commodity diminishes, It directly results in the decrease of other commodity.

Inferior goods

It refers to those goods where there is inverse relationship between income and demand. In case of inferior goods the demand decreases with the increase in income and vice versa.

elasticity of demand

It refers to the level of changes in demand with the changes of price. It was developed by Marshall. It explains the rise in the demand due to decrease in price and falling demand with the rising price. (relation between price and demand).

Price elasticity of demand

It is the percentage of change in quantity of demand of a commodity as a result of changes in the price of a commodity. ED = %Change in quantity of demand / %Change in quantity of the price.

Income elasticity of demand

It is the measurement of percentage change in demand of a commodity with the result of changes in the level of income of the consumer. e y = %change in quantity of demand / %change in the income of the consumer.

Cross elasticity of demand

It is the percentage change in quantity of demand for a commodity as a result of changes in the prices of related goods (the substitute or complementary goods). Ec = %change in quantity of demand x commodity / %change in price of y commodity.

Perfectly elastic demand

It is also called as infinite elastic demand. A small change in price leads

to an in finite change in demand is called perfectly elastic demand.

Perfectly inelastic demand

it is also called as 0 elastic demand. In this case even a grate price or

falling price doesn’t leads to any change in quantity of demand is known as perfectly inelasticity

of demand.

Unitary elastic demand

The percentage change in price leads to the same change of percentage in the

demand is called unitary elastic demand.

Relatively elastic demand

When a percentage change in price leads to more than percentage

change in quantity demand is called relatively elastic demand.

Relatively inelastic demand

When the percentage change in price leads to less than percentage

change in quantity demand is called relatively inelastic demand.

Types of Demand

Friends, Let us read few types of demand based on different types of goods. These points will make us to understand more about the concept of demand and relation with the prices and uses of goods/commodities. That's why I'm including this topic even it is not a concept. so, I'm writing it very shortly. It is for the purpose of understanding of demand concept only.

Joint demand: refers to demand for complementary goods which can satisfy wants jointly.
Composite demand: Refers to demand for a product which has multiple uses.
Short-run and Long-run demand: It is a situation where people react immediately for changes in price of a good in short-period which causes changes in demand. Here the factors are fixed in a firm/industry. whereas, In the long-period firms can adjust their cost and change the prices of the goods in long period. it also results in changes of demand.
Price demand: It is a relation between price of the commodity and willingness of consumer to demand for that commodity.
Income demand: refers to changes in demand due to changes in income of the consumer.
Competitive demand: refers to substitutes which have utility to satisfy same want (Alternatives).
Direct and derived demand: Demand for final goods or consumer goods.

AAC method

It is the mid point of demand curve. It measures the demand when there is less change in price.

Importance of price elasticity of demand

It is useful to finance minister in imposing taxes
Highly useful to monopolists to fix the price
Useful to determine wages
Useful in determining prices of factors of production.

Terms of trade - TOT

It is the ratio of Index of a countries export price to an index of its import price. It is the difference between the value of price in terms of imports and exports in trading.

Tax

It is the compulsory payment of an individual, organisation, firms collected by the central, state and local governments as per the constitution.