Demand function

The demand function is a curve, each point of which varies depending on the size of the demand for individual groups of goods, as well as on a number of factors affecting it. There is another interpretation of this economic concept. In accordance with it, the demand function is a mutual dependence that exists between the price of an item and the consumer demand for it. Other factors are considered constant values.

When constructing models of demand-consumption relationships that find their application when using mathematical methods of statistics, the data obtained when processing information on the price factor, as well as the level of the income part of the population, is used. Consider also:

- data on the availability of the consumer and the terms of use of items relating to goods of long-term use;

- family composition;

- the scale of the construction of housing, which serves as the basis for the existence of the need to purchase furniture, etc.

Most often in economic theory one-factor demand function is used. It reflects the dependence of the need of households on the level of their income. The graphs constructed from these data are called Engel curves - in honor of the German scientist, who first studied their properties.

The demand function in the most generalized form is expressed by direct dependence of volume of demand or consumption of various blessings from an average level of the income of the population. The nature of these curves can vary according to the available indicators. So, with the proportionality of growth in demand and income, a linear demand function arises. The horizontal axis of the abscissas of the constructed graph reflects the amount of change in household money. Ordinate (vertical) serves as a line on which we can see the volumes of demand. The line obtained as a result of using the existing indicators will be practically direct. An example of such a function is the dependence of the expenses and incomes of workers and employees on berries and fruits, ready-made clothes and knitwear, and also on seafood.

There is also a dependence that characterizes the faster growth in demand for a particular commodity group, with a general increase in household incomes. The graph of such a function has the form of a convex curve.

Economic theory also considers the backlog of needs from the growth in the amount of money that occurs when a certain saturation of demand. The graph of such a dependence has the form of a curve of a concave type.

The basis of the mechanism of a market economy is the function of supply and demand. The growing needs of the population are a prerequisite for the producer to increase or start the production of certain goods. Demand generates supply of products necessary for the household, their assortment list and quality. The function of the offer is the ability to connect the consumer and the producer, and the purchase of finished products with their sale. In connection with the increase in demand, there is an increase in the output of goods. At the same time, the quality of the produced product is constantly improved and the costs for its production are reduced. This leads to an increase in the number of proposals.

To achieve equilibrium in the consumer market, a necessary condition is the study of demand. It is divided into several categories:

- implemented (satisfied);

- unsatisfied;

- emerging.

Demand is realized in the event that there is a constant sale of any group of goods that is available in the trading network. Unmet needs arise when the population has the money to buy a certain product with insufficient quantity.