Question

The total demand for
durable goods consists of
A)net demand plus gross demand
B)derived plus autonomous demand
C)new demand plus replacement
demand
D)old demand plus replacement
demand

Answer 1

Answer:

A)net demand plus gross demand

Explanation:

A)net demand plus gross demand

Answer 2

Option C is the correct answer.

The total demand for durable goods consists of new demand plus replacement demand.

Meaning of types of demand is as follows:

1. Gross demand - It is the total goods that the consumer takes home.
2. Net demand - It is the difference between gross demand and initial endowment. It is the net of goods sold and bought in the market.
3. Autonoumous demand - Demand which is independent of demand for other goods. It occurs from natural desire of consumption.
4. Derived demand - Demand which is dependent on the demand of other goods. It arises due to demand of other goods. these are usually needed for further production.
5. New demand - If an asset is purchased or acquired such that there is addition to the existing stock then it is new demand.
6. Replacement demand -If an asset is purchased or acquired such that there is no addition to the existing stock then it is replacement demand. It is done to maintain original level of stock.