Demand
Demand for a commodity refers to the quantities of a commodity, which consumers are willing and able to purchase, at various possible prices during a particular period of time.
Remarks :
- Demand is an effective desire, i. e. a desire accompanied by the willingness to purchase and power to purchase.
- Demand is always expressed in relation to a particular price.
- Demand is always expressed with reference to a particular time period.
Types of Demand :
There are five types of demand:
1. Individual demand and Market demand
2. Ex ante and Ex post Demand
3.Joint Demand
4. Derived Demand
5. composite Demand
1. Individual demand and Market demand
It refers to the quantity of commodity that an individual consumer is willing to and able to purchase at various prices during a particular period of time.
Example : Individual demand is same as household demand.
It refers to the total quantities of a commodity that all the households are willing to buy at various prices during a particular period of time.
Example : Total quantity of milk which all the buyers are willing to purchase at a given price per day.
2. Ex ante and Ex post Demand
Ex ante demand refers to the amount of goods that consumers want to or willing to buy during ma particular period of time.
Ex Post demand refers to the amount of goods that a consumer actually purchase during a specific period.
If the commodity is not available in adequate quantity, the quantity actually purchased will be less than the quantity that the consumer desire to purchase.
3.Joint Demand
It refers to the demand for two or more goods which are used jointly or demand together.
Example: : An increase in the demand for car leads to a simultaneous increase in the demand for petrol as well.
In case of joint demand, a rise in the price of one good leads to a fall in the demand for the other good and vice versa.
4. Derived Demand
The demand for a commodity that arises because of the demand for some other commodity is called derived demand.
Example: Demand for steel, bricks, cement,stone,woods etc. is derived from the demand for houses and other buildings.
5. composite Demand
Demand for goods that have multiple uses is called composite demand.
Example : Demand for steel arises from various uses of steel — such as in making utensils, bus bodies, room coolers, cars and so on.
Originally published at https://www.ecogradeshelp.com on August 3, 2022.