Question

State the determinant of the market demand curve.
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Answer 1

Explanation:

Price of the Product: The price of a product is the most important determinant of market demand in the long-run and the only determinant in the short-run. ... Price of the Related Goods: The market demand for a commodity is also affected by the changes in the price of the related goods.

Answer 2

Answer:

• Population of the Country : The total domestic demand for a product depends also on the size of population. Given the price, per capita income, taste and preferences etc. the larger the population, the larger the demand for a product of common use. With an increase (or decrease) in the size of population, employment percentage remaining the same, demand for the product increases (or decreases). The relation between market demand for a product (normal) and the size of population is similar to the income-demand relationship.

• Distribution of National income : The distribution pattern of national income also affects the demand for a commodity. If national income is evenly distributed, market demand for normal goods will be the largest. If national income is unevenly distributed, i.e., if majority of population belongs to the lower income groups, market demand for essential goods will be the largest, whereas the same for other kinds of goods will be relatively low.