Question

Demand is a powerful force in a free market. In three to four sentences, explain some of the factors that causes changes in demand and why it is important for consumers to understand these changes.

Answer 1

The demand changes as a result of changes in price, other factors determining it being held constant. We shall explain below in detail how these other factors determine market demand for a commodity.

These other factors determine the position or level of demand curve of a commodity.

It may be noted that when there is a change in these non-price factors, the whole curve shifts rightward or leftward as the case may be. The following factors determine market demand for a commodity.