OMTEX CLASSES: Various factors influence the demand for a commodity.

Various factors influence the demand for a commodity.



I do agree with the statement because the following are the determinants of demand.

Demand is influenced by the following factors.

1.       Price : Price is one of the most important factors that affect demand. When price rises demand falls, and when price falls demand rises.

2.       Income: Income is yet one more important factor that affects demand. Demand depends upon income of individuals in the society. Normally, Demand rises with increasing income of the society.

3.       Population: An increase in population, leads to an increase in market demand for goods and services.

4.       Tastes, Habits and Fashions : Some factors such as taste, habit of consumers affect demand; in the market.

5.       Prices of Substitute and Complementary Goods: Demand changes due to changes in the prices of substitute and complementary goods. For example demand for tea changes because of change in the price of coffee. Similarly, demand for motor cars changes , because of change in the price of petrol.

6.       Distribution of Income : Unequal distribution of income and wealth would lead to less demand for goods and services. i.e. demand depends on the distribution of National Income and Wealth.

7.       Expectation about Future Price : If consumers expect a fall in the price of a commodity in the near future, they will demand less at present price and vice versa: It shows that expectations about the future prices affect demand.

8.       Advertisement: The goods which are advertised powerfully on, radio; television and newspapers,    etc.,   push   up demand. Advertisement is an important factor today that affects demand.


9.       Taxation Policy: Government's taxation policy affects demand. For example, a change in income tax will change consumer's disposable income arid therefore demand.

10.     Other Factors: Change in any climatic conditions, traditions, political and social factors also influences demand.

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Linear Equations in Two Variables



Quadratic Equation



Arithmetic Progression



Financial Planning



Probability



Statistics