De ne Demand ?
Demand refers to the quantity of goods and services that a consumer has the willingness and
able to buy the commodity at given price during a particular period of time. For eg if the
chocolate bar cost is Rs10 you want it and have Rs10 to pay for it then the chocolate has the
demand. but if you want it and don’t have the money to pay for it that’s a desire not a demand.
Factors a ecting Demand
1.Price of the commodity
When the price of the commodity will fall down. The quantity demand for goods and services will
rise and when the price of the commodity will rise the quantity demand for goods and services
will fall down. This happens due to law of demand people tends to buy more commodity when
price will become cheaper and people tends to buy less commodity when price will become
expensive. For eg if the price of apple will decrease from Rs 300 to 200 people will buy more due
to fall in price and if the price of apple will increase from Rs 300 to 400 people will buy less.
2.Income of the consumer
• In normal goods if the income of the person will rise the quantity demand for goods and
services will also rise and if the income of the person will fall down the quantity demand for
goods and services will also fall down. There is a positive relationship between income of the
consumer and quantity demand for goods and services for eg electronic device, designer
clothes, luxury car.
• In inferior goods if the income of the person will fall down the quantity demand for goods will
rise and if the income of the person will rise the quantity demand will fall down. There is a
inverse relationship between income of the consumer and quantity demand for goods and
services. For eg course grain, bajra and second hand clothes etc.
3.Price of Related goods
• In substitute goods refers to those goods which substitute the goods for each other ( the goods
can be replace of another goods) like tea and co ee. If the price of tea will increase the demand
for co ee will also rise.
• Complementary goods refers to those goods when two goods are used together to get a equal
level of satisfaction for the consumer. Like car and petrol if the price of petrol will increase the
demand for car will decrease.
4.Taste and preferences of the consumer
Change in taste, fashion, habits or trends also a ects the demand for eg in winter people will
prefer more for hot co ee instead of cold drinks. So the demand for cold drink will decrease and
in summer people will prefer more for cold drinks instead of hot co ee so the demand for cold
drink will rise.
5.Future expectations
If the people will expect that the price of the commodity will increase in future the current demand
for goods and services will increase. And if the people will expect that the price of the commodity
will fall down in future the current demand for goods and services will fall down
6.Population
If the population is larger in the country the demand for goods and services will increase. If the
population is smaller in the country the demand for goods and services will decrease.
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Demand refers to the quantity of goods and services that a consumer has the willingness and
able to buy the commodity at given price during a particular period of time. For eg if the
chocolate bar cost is Rs10 you want it and have Rs10 to pay for it then the chocolate has the
demand. but if you want it and don’t have the money to pay for it that’s a desire not a demand.
Factors a ecting Demand
1.Price of the commodity
When the price of the commodity will fall down. The quantity demand for goods and services will
rise and when the price of the commodity will rise the quantity demand for goods and services
will fall down. This happens due to law of demand people tends to buy more commodity when
price will become cheaper and people tends to buy less commodity when price will become
expensive. For eg if the price of apple will decrease from Rs 300 to 200 people will buy more due
to fall in price and if the price of apple will increase from Rs 300 to 400 people will buy less.
2.Income of the consumer
• In normal goods if the income of the person will rise the quantity demand for goods and
services will also rise and if the income of the person will fall down the quantity demand for
goods and services will also fall down. There is a positive relationship between income of the
consumer and quantity demand for goods and services for eg electronic device, designer
clothes, luxury car.
• In inferior goods if the income of the person will fall down the quantity demand for goods will
rise and if the income of the person will rise the quantity demand will fall down. There is a
inverse relationship between income of the consumer and quantity demand for goods and
services. For eg course grain, bajra and second hand clothes etc.
3.Price of Related goods
• In substitute goods refers to those goods which substitute the goods for each other ( the goods
can be replace of another goods) like tea and co ee. If the price of tea will increase the demand
for co ee will also rise.
• Complementary goods refers to those goods when two goods are used together to get a equal
level of satisfaction for the consumer. Like car and petrol if the price of petrol will increase the
demand for car will decrease.
4.Taste and preferences of the consumer
Change in taste, fashion, habits or trends also a ects the demand for eg in winter people will
prefer more for hot co ee instead of cold drinks. So the demand for cold drink will decrease and
in summer people will prefer more for cold drinks instead of hot co ee so the demand for cold
drink will rise.
5.Future expectations
If the people will expect that the price of the commodity will increase in future the current demand
for goods and services will increase. And if the people will expect that the price of the commodity
will fall down in future the current demand for goods and services will fall down
6.Population
If the population is larger in the country the demand for goods and services will increase. If the
population is smaller in the country the demand for goods and services will decrease.
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