Explain the demand for a commodity, Managerial Economics

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Explain the demand for a commodity

The functional relationship between demand for a commodity and its various determinants may be expressed mathematically in terms of a demand function,

thus:

Dx = f (PX, Py, M, T, A, U) where,
Dx = Quantity demanded for commodity X.
f = functional relation.
PX = the price of commodity X.
Py = the price of substitutes and complementary goods.
M = the money income of the consumer.
T = the taste of the consumer.
A = the advertisement effects.
U = Unknown variables or influences.


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