Profile Photo

Demand and its Determinants Class 12 Economics

NCERT & CBSE Class 12 Economics Demand and its Determinants

Demand and its Determinants 

As we are serving the Economics Class 12 Online Classes through our portal www.takshilalearning.com proper NCERT Economics Class 12 Notes are also available for Board Exams Preparation. Below is a simple and easy explanation of Demand and its determinants.

 

DEMAND AND ITS DETERMINANTS

DEMAND of a commodity refers to the quantity of a commodity which a consumer is willing to buy at a given price and at a given point of time.

 

DETERMINANTS OF DEMAND

The various factors which determine the demand for a commodity are described as follows:

  • PRICE OF THE COMMODITY

The demand for a commodity is inversely related to its price. This means when the price of the commodity increases, its quantity demanded decreases and vice versa. This happens due to the change in the purchasing power or the real income of the consumer. When the price of the consumer increases, the purchasing power of the consumer decreases due to which he is able to buy a lesser quantity of the same commodity with his given income thus resulting in a drop in the quantity demanded.

 

  • PRICE OF RELATED GOODS

PRICE OF SUBSTITUTE GOODS

Substitute goods are the goods which can be used in place of each other to satisfy a want. For instance, tea and coffee are substitute goods. The quantity demanded of a commodity is directly related to the price of the substitute good. When the price of coffee which is a substitute of tea increases, the demand of tea will increase since now the consumers who were previously consuming coffee will start consuming tea, thus, leading to an increase in its demand.

 

PRICE OF COMPLIMENTARY GOODS

The goods which are used together to satisfy a single want are called complimentary goods. For instance, pen and refill are used in compliment with each other for the purpose of writing. The quantity demanded for a commodity is inversely related to the price of its complimentary good. When the price of pen increases, the demand for its refill decreases since many users switch to other pens available in the market and start using their complimentary refills.

 

  • INCOME OF THE CONSUMER

The effect of the income of the consumer on the quantity demanded depends on the nature of the good. There are two types of goods

 

  • NORMAL GOODS – Those goods whose demand increases with an increase in the income of the consumer are normal goods. E.g. Wheat, rice etc.

 

  • INFERIOR GOODS – Those goods whose demand falls with an increase in the income of the consumer are called inferior goods. E.g. Jowar, barley etc.

 

  • TASTES AND PREFERENCE OF THE CONSUMER

A favourable change in the taste and preference of the consumer leads to a rise in the demand of a commodity and an unfavourable change in the taste and preference of the consumer drops the quantity demanded of a commodity.

  • MISCELLANEOUS

 

DETERMINANTS OF DEMAND

The various factors which determine the demand for a commodity are described as follows:

 

  • PRICE OF THE COMMODITY

The demand for a commodity is inversely related to its price. This means when the price of the commodity increases, its quantity demanded decreases and vice versa. This happens due to the change in the purchasing power or the real income of the consumer. When the price of the consumer increases, the purchasing power of the consumer decreases due to which he is able to buy a lesser quantity of the same commodity with his given income thus resulting in a drop in the quantity demanded.

 

  • PRICE OF RELATED GOODS

PRICE OF SUBSTITUTE GOODS

Substitute goods are the goods which can be used in place of each other to satisfy a want. For instance, tea and coffee are substitute goods. The quantity demanded of a commodity is directly related to the price of the substitute good. When the price of coffee which is a substitute of tea increases, the demand of tea will increase since now the consumers who were previously consuming coffee will start consuming tea, thus, leading to an increase in its demand.

PRICE OF COMPLIMENTARY GOODS

The goods which are used together to satisfy a single want are called complimentary goods. For instance, pen and refill are used in compliment with each other for the purpose of writing. The quantity demanded for a commodity is inversely related to the price of its complimentary good. When the price of pen increases, the demand for its refill decreases since many users switch to other pens available in the market and start using their complimentary refills.

  • INCOME OF THE CONSUMER

The effect of the income of the consumer on the quantity demanded depends on the nature of the good. There are two types of goods

  • NORMAL GOODS – Those goods whose demand increases with an increase in the income of the consumer are normal goods. E.g. Wheat, rice etc.

 

  • INFERIOR GOODS – Those goods whose demand falls with an increase in the income of the consumer are called inferior goods. E.g. Jowar, barley etc.

 

  • TASTES AND PREFERENCE OF THE CONSUMER

A favourable change in the taste and preference of the consumer leads to a rise in the demand of a commodity and an unfavourable change in the taste and preference of the consumer drops the quantity demanded of a commodity.

  • MISCELLANEOUS

 

Now Based on your knowledge tell us What one should do to raise Demand of his commodity?

You can also study detailed explanation of –

Determinants of Market 

Determinants of supply and Supply Curve 

For more Macroeconomics Class 12 and Microeconomics Class 12 Online Courses and study material for other subjects also, login to www.takshilalearning.com  and register yourself to brighten your future.

 

Subscribe to our social channel.

Economics Online Classes Demand and its Determinants Free Notes Economics Online Classes Demand and its Determinants Free Notes Economics Online Classes Demand and its Determinants Free Notes Economics Online Classes Demand and its Determinants Free NotesEconomics Online Classes Demand and its Determinants Free Notes

Follow us on Blogarama

Call us: 8800999280/8800999284 or fill the form for any other details:

No comments, be the first one to comment !

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    © 2015-19 Takshila Learning. All Rights Reserved.
    Request Callback
    close slider
    Send us a Message

    Login

    Open chat
    1
    Whats App
    Hello , How May I Help You?
    Takshila Learning https://www.takshilalearning.com/economics-demand-and-its-determinants-notes Demand and its Determinants Class 12 Economics
    Powered by