What is demand function? |
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| Ans : Demand function is defined as the functional relationship between demand for a commodity and its determinants. It is expressed as;
Dx = F (Pₓ,Y,Pr,T,A,P,D,E)
Where,
Dₓ = Demand for commodity x
F = Function
Y = Income of the consumer
Pr = Price of related goods
T = Taste and preference of the consumer
A = Advertisement
P = Population and its composition
D = Distribution of income
E = Expectation of consumer
Above given demand function is multi variable demand function. If we assume that there is only change in price other things remaining constant, we get single variable demand function which is as follow;
Dx = F (Pₓ)
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