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Determinants of demand
As the population and number of consumers increases, the overall demand for goods will also rise. Demand depends on factors like income, tastes, product preferences, prices of substitutes and complements, and special occasions. When income or the price of complements decrease, demand is likely to increase. However, if the price of substitutes decreases or income declines, demand may fall instead. Advertising can also impact tastes and demand over time.
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Determinants of demand
- 3. As the populationincrease, the number of potential consumers will also increase
- 5. • Normal goods– demand increase as income increase • Inferior goods – demand does not increase even when the income increase • The increase in the demand of an individual is due to the income increase even if there is no change in price
- 8. Demand increase forthe products which are used for the occasion
- 10. • When theprice of one commodity increase, the demand for it will decrease. • Substitute Goods – Person can buy in place of other goods • Complementary Goods – Consumed simultaneously
- 12. • Change intaste and preference for a particular product affect the demand for products. • Advertisement influence the consumers’ tastes
- 17. • Increase inincome • Product preference • Expectation and speculation • Increase in the number of consumers • Celebration or occasion • Price decrease of a complementary product
- 19. • Decrease inincome • Price increase of a complementary good • Consumers do not speculate about price increases • Decrease in the number of consumers • Price decrease of substitute goods