Category: 3. Demand

What are Normal Goods? The goods whose demand increases when there is an increase in the income of the consumer are known as Normal Goods. These include the commodities which we usually purchase. Besides, in general, consumers purchase more of normal goods when their income increases and purchase less of these goods when their income falls. For…

What are Normal Goods? The goods whose demand increases when there is an increase in the income of the consumer are known as Normal Goods. These include the commodities which we usually purchase. Besides, in general, consumers purchase more of normal goods when their income increases and purchase less of these goods when their income falls. For…

What are Substitute Goods? The goods which can be used in place of one another to satisfy a specific want, like tea and coffee are known as Substitute Goods. The price of substitute goods directly affects the demand for a given commodity. For example, if the price of a substitute good (say, coffee) increases, then demand for the given…

Substitute Goods and Complementary Goods are two economic concepts describing the relationship between two or more different products in terms of their demand and consumption patterns. Substitute goods are the goods that can be used in place of one another; however, Complementary goods are the goods that can be used together. It is essential to…

What is Contraction in Demand? When there is a fall in the quantity demanded of a commodity because of an increase in its price by keeping other factors constant, it is known as Contraction in Demand. In simple terms, the demand for a commodity fall because of an increase in its price. Contraction in demand…

What is Expansion in Demand? When there is an increase in the quantity demanded of a commodity because of a fall in its price by keeping other factors constant, it is known as an Expansion in Demand. In simple terms, the demand for a commodity rise because of a fall in its price. Expansion in…

Demand refers to the quantity of a commodity the customer is willing and capable to purchase, at any given time and at each possible price. The above definition highlights essential components of demand: (i) Quantity of the commodity (ii) Willingness to buy (iii) Price of the commodity (iv) Period of time. Quantity Demanded of a…

What is the Law of Demand? The Law of Demand states that there is an inverse relationship between the price and quantity demanded of a commodity, keeping other factors constant or ceteris paribus. It is also known as the First Law of Purchase. There are several other factors besides the price of the given commodity that affect the…

Demand refers to the quantity of a commodity the customer is willing and capable to purchase, at any given time and at each possible price. The above definition highlights essential components of demand: (i) Quantity of the commodity (ii) Willingness to buy (iii) Price of the commodity (iv) Period of time. Demand for a commodity…

The demand for a commodity can be with respect to an individual and an entire market. However, Individual Demand is different from Market Demand. Individual Demand The quantity of a commodity a consumer is willing and able to purchase at every possible price during a specific time period is known as Individual Demand. There are…