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Understanding **Demand Analysis** is crucial not just for cracking the UGC NET exam, but also for building a strong foundation in economics and business decision-making. Whether you're appearing for **UGC NET Commerce or Economics**, this topic is a staple in both papers and interviews.

What is Demand Analysis?

**Demand Analysis** refers to the process of understanding consumer demand for a product or service. It examines how **price, income, tastes, preferences**, and **substitutes** affect the quantity demanded.

Simply put, it helps businesses and economists answer:  

> “How much of a product will consumers buy at different prices?”

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Core Concepts in Demand Analysis (UGC NET Focused)

1. Law of Demand

- States that *other things being equal*, the quantity demanded falls when price rises and vice versa.

- Inverse relationship between **price** and **demand**.

- UGC NET Tip: Watch for **exceptions** like Giffen goods and Veblen goods.

2. Determinants of Demand

Key factors influencing demand:

- **Price of the good**

- **Income of the consumer** (normal vs. inferior goods)

- **Prices of related goods** (substitutes and complements)

- **Consumer preferences**

- **Future expectations**

- **Number of buyers**

3. Demand Function

Mathematical expression:

> Qd = f(P, Y, Pr, T, E, N)  

Where:  

- Qd = Quantity demanded  

- P = Price  

- Y = Income  

- Pr = Prices of related goods  

- T = Tastes & preferences  

- E = Expectations  

- N = Number of consumers

4. Types of Demand

- **Price Demand**: Based on price change.

- **Income Demand**: Based on income change.

- **Cross Demand**: Based on price of related goods.

5. Elasticity of Demand

This is a **high-yield topic** for UGC NET:

- **Price Elasticity of Demand (PED)**: % change in Qd / % change in Price

- **Income Elasticity**: % change in Qd / % change in Income

- **Cross Elasticity**: % change in Qd of Good X / % change in Price of Good Y

NET Pro Tip: Remember the five types of price elasticity (perfectly elastic, perfectly inelastic, relatively elastic, relatively inelastic, unitary).

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Application-Based Questions in UGC NET

UGC NET is known for mixing **conceptual** and **application-based** MCQs. You might be asked:

- What happens to the demand curve when income increases?

- What elasticity type suits essential goods like salt?

- How does cross elasticity help determine substitute goods?

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Final Tips for UGC NET

- Use graphs to understand shifts and movements in the demand curve.

- Practice numerical problems on elasticity.

- Understand real-life examples (Netflix vs. cable TV = substitutes).

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Conclusion

Mastering Demand Analysis is not just helpful for UGC NET, but also for interviews, research, and business strategy. Focus on understanding **why** demand behaves the way it does, not just memorizing formulas.

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