What is Demand? Law of Demand

What is Demand?

Ans- Demand for a commodity refers to the quantity of a commodity which a consumer is willing to buy at a given price in a given period of time.

For Example- A consumer demands 9kg of rice in a month at the price of Rs.15 kg. This a complete example of demand for a commodity.

Demand

What are the Determinants of Demand?

Ans- Demand is determined by many factors. Some of the most important determinants of demand for a particular product are its own price, consumer’s income, prices of other commodities, tastes and preference, time period and population etc.

What are the Kinds or Types of Demand?

Ans- Demand is classified into four types –

         

 

 Direct Demand:-

 Direct Demand refers to demand for a commodity that is directly consumed to satisfy human wants. Example- Rice, Bread, Fruits, etc.

a)      Price Demand: It refers to the demand for a commodity at a particular price.

b)      Income Demand: It refers to the demand for a commodity at various levels for consumer’s income.

c)       Cross Demand: It refers to quantity demanded of a commodity due to change in the price of other commodity.

Indirect Demand:-

 Demand for factors of products is indirect because they help in the production of a commodity which is directly demanded by the consumer in the market.

Joint Demand:-

 It refers to the demand for those goods which are always demanded jointly. Example - Car and Petrol.

Composite Demand:-

 It refers to the total demand for a commodity which can be used for various purposes.

Law of Demand

It states that, other things remaining equal, the quantity demanded for a commodity increases when its price falls and decreases when the price rises.

In the law of demand other things mean all demand determinants except price.

According to law of demand Price and quantity demanded are inversely related.                        

Price(Rs.)	Quantity demanded
2 3 4	15 12 10

 

  

Law of Demand

 

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