What is demand? Factors Affecting it.

The demand for a commodity is its quantity which consumers are able and willing to buy at various prices during a given period of time.

In Economics, use of the word 'Demend' is made to show the relationship between the prices of a commodity and the amounts of the commodity which consumers want to purchase at those prices.

DEFINITION

According to Prof. Hibdon, " Demand means the various quantities of goods that would be purchased per time period at different prices in a given market."

DETERMINANTS OF DEMAND

The factors which determine the level of demand for any commodity are:-

1) PRICE:- The higher the price of a commodity, the lower the quantity demanded. The lower the price, the higher the quantity demanded.

2) PRICE OF OTHER COMMODITIES:- There are 3 types of commodities in this context- Substitutes, Complementary goods and Unrelated goods.
Substitutes are those commodities which satisfy similar wants such as tea and coffee.Price variation in one will change the demand for other inversely.
Complementary goods are those goods which cannot be used without each other. Price variation in one will change the price of other directly.
Unrelated goods have no effect on each other.

3) INCOME:- A rise in the consumers income raises the demand for a commodity and a fall in his income reduces the demand for it.

4) TASTES:- When there is a change in the tastes of consumers in favour of a commodity its demand will rise with no change in its price or any other factor. On the other hand, change in tastes against a commodity leads to a fall in its demand, other factors remaining the same.

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