We have meaning of Demand function and Types of demand function. We have detail information of the demand functions.
Demand function and Types of demand function
Following is the detail information of the demand function.
Meaning of the demand function
Demand function is the functional /numerical/ mathematical relationship between demand and its determinants. Similarly, the demand function shows how the quantity demanded of a good or service changes as its price, consumer income, and other factors change.
Demad function is expressed as:
Qx = f(Px,Py,Y,T,P,A)
Where.
Qx = demand for goods x
Px = price of goods x
Py = price of related goods
Y = Income
T = Taste and preference ,
A= Advertisement
Hence,
the demand function is necessary to understanding consumer behavior and predicting market trends.
Types of Demand Function
Following are the types of demand function.
1) Linear Demand Function :
A demand function is said to be linear when slope of demand curve are same or constant throughout its length.
Linear Demand function is expressed as
Qx = a-bPx
Where
Qx = quantity demand for x goods
a = autonomous demand
b = slope of demand curve
Px = price of x goods
Similarly, The linear demand function implies that the demand curve for the good or service is a straight line, with a negative slope. This means that as the price of the good or service increases, the quantity demanded decreases, and vice versa.
2) Non-linear Demand function:
A demand function is said to be non-linear when slope of demand curve is not same or constant throughout its length.
Qx = APx ^-b
Where
Qx = quantity demand for x goods
a = autonomous demand
b = slope of demand curve
Px = price of x goods
Similarly, Non-linear demand functions are useful when the relationship between price and quantity demanded is more complex than a simple linear relationship.
Other Important Links:
a. BBS 1st Year all subject notes: CLICK HERE
Frequently Asked Questions.
What is demand Function?
= Demand function is the functional /numerical/ mathematical relationship between demand and its determinants.
