Profile Photo

NCERT & CBSE Class 12 Economics Demand and its Determinants

NCERT & CBSE Class 12 Economics Demand and its Determinants

NCERT & CBSE Class 12 Economics Demand and its Determinants

As we are serving the Economics Online Classes through our portal www.takshilalearning.com. Along with the CBSE Class 12 Economics Online Classes, proper Economic Notes are also available for Board Exams Preparation. Below is a simple and easy explanation of Demand and its determinants. Economics Notes related to the Demand and its determinants have been discussed briefly which will help you to understand the factors which determine the demand for the commodity.

Economics Notes Class 12 : 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

The detailed explanation of the “Demand and its determinants” , “Economic Notes” with examples is available for CBSE class 12 Economics Online classes.

In  school online classes, all other topics and subjects of Class 12 and other classes  are explained by experts and experienced faculties.

 

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 *

    © 2015-17 Takshila Learning. All Rights Reserved.
    Request Callback
    close slider
    For course & fee related queries, Leave your details and our counsellor will get back to you or Call us at 8800-999-280
    • This field is for validation purposes and should be left unchanged.

    Login