Demand function
Topic: Consumer Behaviour, Demand and Elasticity · NCERT: Class 12, Ch 2 "Theory of Consumer Behaviour"
Meaning
A demand function is a rule that links how much of a good a consumer chooses to buy to the price of that good. It is written as X = f(P): quantity demanded (X) depends on the good's own price (P). Other prices, the consumer's income and her tastes are held constant. Its graph is the demand curve. In economics, price (the independent variable) goes on the vertical axis and quantity on the horizontal axis. This is the reverse of the usual maths practice.
Example
Srivalli's demand for mangoes can be written as X = f(P). At ₹150 per kg she buys 1 kg. At ₹100 she buys 2 kg. At ₹50 she buys 3 kg.
Don't confuse with
- Demand schedule: the demand function is the rule or equation. The schedule is a table of price-quantity pairs taken from it.
- Determinants of demand: the demand function above isolates own price only. Changes in income, related prices or tastes do not move along it. They change the function itself.