THEORY OF DEMAND

The theory and anlysis of demand provides several useful insights for business decision making. Demand for a commodity is defined as the quanity a consumer is willing to purchase at the prevalling price, given sufficient purchasibng power or income for that purpose. As against the demand of an individual consumer or house hold, the manager of a firm may consider the market demand which is the aggeregation of demand levels of all the consumers at a given price.