1.Define Demand.

According to Hansen, "By demand , we mean the quantity of a commodity that will be purchased at a particular price and not merely the desire of a thing".

2.What are the main features of  Demand?

The main features of demand are it is a relationship between demand and price differences between desire and demand at a point of time.

3.Define the Law of Demand.

The law of Demand states the relationship between the quantity demanded and price. According to Prof: Marshall "the amount demanded increases with a fall in price and diminishes with a rise in price".

4.Give any four assumptions of Law of demand.

The main assumptions of the Law of demand are as under :

• No change in income
• No change in tastes and preferences of the consumer
• Price of the related commodities should remain constant
• No change in the size of population

5.What is supply?

Supply of a commodity refers to the quantity of the commodity which a seller is prepared to sell at a given price and at a given time.

6.What is meant by the Law of Supply?

Law of supply expresses the relation between the price of a commodity and its supply. When price rises, supply extends and when price falls, supply contracts other things being equal.

7.What are the assumptions of the Law of supply?

1. There is no change in the prices of related commodity.
2. There is no change in the technique of production
3. There is no change in the prices of the factors of production
4. There is no change in the goal of firm
5. There is no expectation of change in the price of the commodity.

8.What are factors or determinants influencing supply?

Price of the commodity, price of the related goods, cost of production new inventions natural factors, use of inputs, development of transport and communication, agreement among producers and future expectations.

9.What factors do influence demand of a commodity?

The factors which influence demand of a commodity are: Price of a commodity, income of the consumer, distribution of wealth, population, taste preference and government policy.

10.Give exceptions of the Law of Demand.

Articles of distinction, expectation of rise or fall in price in future, ignorance, war or emergency, possibility of shortage of supply.