CHAPTER 2

Consumer Behaviour and Demand

“Teach a parrot the terms ‘supply and demand’ and you’ve got an economist.”

—Thomas Carlyle

Topics Covered

  • Consumer’s Equilibrium
  • Meaning and attainment of equilibrium through Utility Approach - One and two commodity cases.
  • Demand:
    • Market demand
    • Determinants of demand
    • Demand schedule
  • Demand curve
  • Movement along and shifts in the demand curve
  • Price elasticity of demand
  • Measurement of price elasticity of demand
    • Percentage method
    • Geometric method
    • Total expenditure method

CHAPTER AT A GLANCE

  1. Consumer is someone who buys goods and services for the satisfaction of wants. For a consumer to be called rational they should seek to maximise their satisfaction in spending their income.
  2. Equilibrium is a ...

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