# Topic 3.1 - DD Function, DD Curve Function and Market DD

### Topic 3.1 - DD Function, DD Curve Function and Market DD

MT
##### Melinda Tai
Melinda's Personal Gallery
##### Transcript
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Hi there!
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Let's start Topic 3.1, shall we?
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Let's go!!!
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1 - Determinants of demand
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2 - Demand Function
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3 - Demand Curve Function
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4 - Market Demand
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Determinants of demand
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Demand usually are influence by few factors:, such as
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Price of the product
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Income of consumers
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Taste or preferences
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Price of related goods
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Demand function summarizes the factors that influence quantity demanded In functional form, demand function can be expressed as
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On the other hand, demand curve function shows relationship between quantity demanded and the price of the product.
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In functional form, the demand curve is;
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Let's take this dd function as our example;
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Qx = 240 - 7Px + 6A + 20M Where Qx = Quantity of X sold, Px = Price of X (RM 5), A is advertising expenditure (RM 200) and M is income level (RM 100).
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To derive dd curve function, we need to substitute the value of A and M into the dd function.
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Qx = 240 - 7Px + 6(200) + 20(100)
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Qx = 3440 - 7Px
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and from dd curve function, we can transform it to the conventional form Qx = 3440 - 7Px 7Px = 3440 - Qx Px = (3440 / 7) - (1/7)Q
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Px = 491.4 - 0.143Qx
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Market dd of a product or service is the sum of individual demand. To get the market dd function, add the individual dd function horizontally.
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Let's look at this example
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Given, individual dd function as: Individual 1 ----- Q₁ = 10 – 4p Individual 2 ----- Q₂ = 6 – 3p Individual 3 ----- Q₃ = 15 – 0.9p
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Since Qm = Qa + Qb + Qc + … + Qn Qm = (10 – 4p) + (6 – 3p) + (15 – 0.9p) Qm = 31 – 7.9p or Pm = 3.92 – 0.126Q