Define Demand.Explain three factors affecting demand for a commodity by a consumer.
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(a) (i) Demand: Demand is the quantity of a commodity that a consumer is willing and able to buy, at each possible price during a given period of time.
(ii) 1. Price of Commodity : Other things being equal, with a rise in own price of the commodity, its demand contracts, and with a fall in price, its demand extends. This inverse relationship between own price if the commodity and its demands is called Law of Demand.
2. Price of related goods : Demand for a commodity is also influenced by change in price of related goods. The related goods are of two kinds : • Substitute goods • Complementary goods
3. Income : Demand for a commodity is also affected by income. Change in income may have a positive or negative effect on demand of the product depending upon type of good.
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