Hello everyone i hope you all are fine and safe from the coronavirus outbreak. Today i will tell you about the demand of goods which is a small topic in economics.
Demand is the quantity of a good or service that consumers are willing and able to buy at a given price in a given time period.the demand must satisfy the following requirement:Desire for specific commodity .Sufficient resources to purchase the commodity Availability of the commodity at certain price, certain place, certain time.....then demand is an effective desire to obtain certain commodity at certain price , place and time.Demand is the entire relationship between price and quantity ...if there is increase in price quantity demand decreases and if price decreases quantity demand increased.there is inverse relationship between price and quantity demanded.And is called law of demand
This law operates only when income of person who demanded good or service remains constant, taste of the buyer should not alter, price of other good substitute good or complimentary good should remain constant, no new substitute for the commodity and in near future rise in price should not be expected..
***Determinants of Demand***
The factors that influence a consumer's decision to purchase a commodity are known as determinants of demand.some of them are:
1) price of the commodity is the most important factor that determines demand if there is higher price of the commodity ,the lower is the quantity demanded and vice versa.
2) price of related commodity: related commodity are of two types
Substitutes goods and complimentary goods .
Substitutes are those goods which can be used One another example tea and coffee . When price of tea falls demand for coffee also falls. Because when price of tea falls people buy more tea and less coffee.Complimentary goods are those goods which can b used together or jointly.example car and petrol when price of car raised demand for petrol falls .
3) Demand also depends on income of the consumer .if the income of consumer will rise it will rise demand for commodities and vice versa.
4) taste of the consumer:we like to consume those commodities which suits our taste.Demand for commodities bears a direct relationship to taste . Example favorable taste increases our demand and unfavorable taste decreases our demand.it change from person to person, place to place and time to time.
Besides these, size and composition of population, distribution of income, expected change in future, rate of interest,money supply, business conditions,govt. policy are some other factors which influence the demand.
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