Topics
Demand
- Introduction to Microeconomics and Macroeconomics
- Microeconomics
- Macroeconomics
- Macroeconomics Vs Microeconomics
- Introduction to Demand
- Meaning of Demand
- Features of Demand
- Types of Demand
- Determinants of Demand
- Demand Function
- Quantity Demanded and Demand
- Law of Demand
- Demand Schedule
- Demand Curve
- Individual Demand Curve to Market Demand Curve
- Slope of the Demand Curve
- Linear Demand Curve
- Reasons for the Downward Slope of the Demand Curve
- Importance of the Law of Demand
- Exceptions to the Law of Demand
- Movement Along the Demand Curve
- Change in Demand – Shift in Demand Curve
- Difference Between Extension and Increase in Demand
- Difference Between Contraction and Decrease in Demand
- Cross Price Effects
- Relationship Between Income and Demand
- Impact of Tastes and Preferences on Demand for a Commodity
- Industry Demand Vs Firm Demand
Microeconomic Theory
Theory of Income and Employment
Elasticity of Demand
- Concept of Elasticity of Demand
- Types of Elasticity of Demand > Price Elasticity
- Methods of Measuring Price Elasticity of Demand
- Percentage or Proportionate Method
- Total Expenditure Method
- Point Method (Geometric Method)
- Arc Elasticity of Demand
- Revenue Method
- Numerical Problems of Price Elasticity of Demand
- Factors Affecting Price Elasticity of Demand
- Importance of Elasticity of Demand
- Types of Elasticity of Demand > Income Elasticity
- Types of Elasticity of Demand > Cross Elasticity
Money and Banking
Supply
- Concept of Supply
- Distinction Between Supply and Stock
- Determinants of Supply
- Supply Schedule and Supply Curve
- Individual Supply Schedule and Supply Curve
- Market Supply Schedule and Supply Curve
- Law of Supply
- Time Period and Supply
- Exceptions to the Law of Supply
- Shifts in the Supply Curve
- Change in Supply> Extension and Contraction in Supply
- Change in Supply> Increase and Decrease in Supply
- Expansion of Supply and Increase in Supply
- Contraction of Supply and Decrease in Supply
- Elasticity of Supply
- Price Elasticity of Supply
- Categories (Degrees) of Elasticity of Supply
- Measurement of Elasticity of Supply > Percentage Method
- Measurement of Elasticity of Supply > Geometric or Point Method
- Determinants of Elasticity of Supply
Balance of Payments and Exchange Rate
Market Mechanism
- Basic Concepts of Equilibrium and Equilibrium Price
- Equilibrium Price and Quantity in a Competitive Market
- Effects of Changes (Shifts) in Demand on Equilibrium Price and Equilibrium Quantity
- Effects of Changes (Shifts) in Supply on Equilibrium Price and Equilibrium Quantity
- Effects of Simultaneous Changes (Shifts) in Demand and Supply
- Some Special Cases of Equilibrium
- Applications of Tools of Demand and Supply Price Control
- Mаximum Price Legislation or Price Ceiling and Rationing
- Minimum Price Legislation or Floor Price
Public Finance
Concepts of Production
- Basics of Production Theory
- Concept of Product
- Factors of Production
- Production Function
- Types of Production Functions
- Variation of Output in the Short-Run Returns to a Factor
- Relationship between Average Product (AP) and Marginal Product (MP)
- Relationship between Total Product (TP) and Marginal Product (MP)
- Returns to a Factor - Laws of Returns to a Variable Factor
- Law of Variable Proportions
- Explanation of the Law of Variable Proportions
- Three Stages of Production
- Stages of Operation and the Decision to Produce
- Changes in Production
- Returns to a Factor or Law of Returns
- Variation of Output in the Long Run - Returns to Scale
- Comparison Between Laws of Returns and Returns to Scale
- Scale of Production
- Concept of Indivisibility
- Economies of Scale
- Diseconomies of Scale
- Comparison Between Laws of Returns and Returns to Scale
National Income
Cost and Revenue
- Cost of Production
- Theories of Costs: Traditional Theory of Costs/Short Run Cost Curves
- Cost Concepts > Total Costs
- Cost Concepts > Average Cost
- Cost Concepts > Marginal Cost
- Costs in Long Run Period
- Difference Between Short - Run & Long Run Costs
- Behaviour of Cost in the Short - Run
- Relationship between Average and Marginal Cost
- Long-Run Cost Curves
- Revenue Concepts
- Relation Between Total, Average and Marginal Revenue
- Revenue Curve under Perfect Competition
- Revenue Curve under Monopoly
- Revenue Curve under Imperfect Competition
- Relationship Between (Mutual Determination) AR, MR, and Elasticity of Demand
- Revenue Curve under Oligopoly
- Significance of Revenue Curve
Main Market Forms and Equilibrium of a Firm
- Concept of Market
- Market Structure
- Classification of Market Structure
- Perfect Competition
- Monopoly
- Monopolistic Competition
- Oligopoly
- Duopoly
- Bilateral Monopoly
- Concept of Monopsony
- Other Forms of Market
- Factors Determining Market / Extent of Market
- Demand Curves of Firms under Different Market Forms
- Comparison between different forms of market
CISCE: Class 12
Introduction
A change in demand means people want to buy more or less of a product at each price because something other than the product’s own price changes. The whole demand curve either shifts right (increase) or left (decrease). This is different from movement along the curve, which only happens if the product’s own price changes.
CISCE: Class 12
Law of Demand vs. Change in Demand
| Aspect | Law of Demand | Change in Demand |
|---|---|---|
| Meaning | As price increases, quantity demanded decreases, and vice versa—assuming other factors stay constant. | Shift of the entire demand curve due to changes in factors like income, tastes, or prices of other goods (not price itself). |
| Visual/Chart | Movement along same demand curve | Shift to a new demand curve |
| Example | Price falls, you buy more | Your income rises, you buy more at every price |
CISCE: Class 12
Types
1) Increase in Demand: The demand curve shifts right; at any given price, people buy more.
Example: When income rises, at ₹100/kg, the household buys 2 kg (up from 1 kg).
2) Decrease in Demand: The demand curve shifts left; at the same price, people buy less.
Example: If income drops or trends change, buy only 1 kg at ₹100/kg (down from 2 kg).
CISCE: Class 12
Main Causes
1) Change in consumer income (normal goods: income ↑, demand ↑; inferior goods: income ↑, demand ↓)
2) Change in tastes, fashions, or preferences
3) Change in prices of related goods:
- Substitute goods (e.g., if Pepsi becomes expensive, Coke demand may increase)
- Complementary goods (e.g., fall in price of smartphones may increase demand for mobile apps)
4) Change in population size
5) Expectation of future price increases
CISCE: Class 12
Real-Life Application
- More students in a city → School uniform demand increases
- Social media trend for a product → Suddenly everyone wants it, even if the price is unchanged
- Summer heat → Higher demand for ice cream at all price points (seasonal demand shift)
- New job/income raise → People buy better branded goods, not just more of the same.
CISCE: Class 12
Key Point Summary
- Change in Demand = Curve Shifts: Caused by factors like income, taste, population, and related goods' prices (not the product's own price).
- Law of Demand = Movement Along Curve: Only own price changes, all else constant.
- Increase in Demand: The Entire curve shifts right (more at each price).
- Decrease in Demand: The Entire curve shifts left (less at each price).
