Demand Function

The demand function is a mathematical tool that describes the relationship between the quantity demanded of a good and its key influencing factors (such as price, income, etc.). This function is widely used in political economy to analyze how demand or consumer behavior shifts with changes in the price of a good or market conditions. There are two main types of demand functions:

• Individual Demand Function. The individual demand function explores the relationship between the quantity of a good demanded and the factors that shape consumer choice (price, income, etc.). This function is primarily applied in microeconomics to examine the decisions of individual consumers.
• Aggregate Demand Function. The aggregate demand function looks at the relationship between overall demand and its key factors (prices, income, investments, public spending, etc.) from a collective perspective. This function is central to macroeconomics.