Question

What is a demand function?

Answer 1

A demand function represents the mathematical relationship between the quantity demanded of a commodity and the factors affecting it. A basic form of the demand function is written as:

D_n = f(P_n, Y, T)

Here:

• D_n stands for the demand for a particular commodity, ‘n’.
• P_n represents the price of that commodity.
• Y refers to the consumer’s income.
• T denotes the consumer’s tastes and preferences.

This function shows how changes in these variables influence the quantity demanded.