What are the types of demand? |
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| Ans : The types of demand are explained below:
i) Price demand:- The change in quantity demand of product due to the change in price of product is called price demand. There is a negative relationship between price and quantity demand. If the price of one goods increases then the demand for other goods decreases and vice versa. Quantity demanded changes with change in price and all other factors are assumed to remain constant. Here other factors consist, income of consumer, price of commodity, tast and preference, size and composition of population etc.
ii) Income demand:- The relationship between income and demand is known as income demand. There is a positive relation between income and demand. If income of the consumer increases, there is increase in demand and if income of the consumer decreases, there is decrease in demand. Income demand can be clarified under the following two types of goods i.e. normal and inferior goods.
iii) Joint demand:- The demand for several goods by a consumer to fulfill their single purpose is known as joint demand. The demand for complementary goods like pen and ink, bike and petrol, etc. In case of these goods, if price of one goods increases then the demand for other goods decreases.
iv) Competitive demand:- The demand for substitute goods are known as competitive demand. In that demand, in the absence of one another can be used. For example, Tea and coffee, coke and Pepsi etc. In case of these goods, a rise in price of one goods leads to rise in demand of other goods.
v) Derived demand:- The demand for the factors of production like land, labor, capital and organization are called derived demand because it is demanded for the production of goods and services.
vi) Composite demand:- The commodity or service which can fulfill several needs, that is called composite demand. For example, demand for electricity, sugar, milk etc. Here, electricity is demanded for cooking, hitting, ironing, lighting, photocopying and running machines and other purposes. So, demand for electricity is called composite demand.
vii) Direct demand:- The commodity which is directly consumed by a consumer is known as direct demand. The demands for normal goods like food, clothes, etc. are the example of direct demand.
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