Economics class 12th :: "Chapter - Theory of Demand"

Theory of demand : It means what consumer willing and able to purchase a commodity at a various price level at a given period of time.

There are three elements of demand -

• Desire
• Means to fulfill your desire
• And readiness to spend

Question 1 - What are the Factor of demand, Function of demand and Determinant of demand?

Answer 1 - 

1. Price of the commodity --> There is inverse relationship between commodity and quantity demanded, When the other thing remain constant. Decrease in the price of the commodity leads to extension in demand and increase in the price of the commodity leads to contraction in demand.                                                                                                                                                                                                                                                                                  
2. Taste & Preference --> If Taste & Preference are favourable for a commodity then demand will increase & If taste & preference are Unfavourable the demand will decrease.                                                                                                                                                                                                         
                                                                                                                               
3. Population --> If population of country increase then demand for commodity or product will increase and if population of country will decrease then demand for commodity and product will decrease.                                                                                                                                                          
                                                                                                                                 
4. Distribution of income --> If Distribution of income is equal in a country then the demand for the commodity will increase & If Distribution of income is unequal in a country then the demand for the commodity will decrease.                                                 
5. Price of related goods --> If the price of one goods increases then the demand of substitute goods also increase and the demand of complementary goods decreases.   

Question 2 - Distinguish between Substitute & Complementary goods ?

Question 3 - Distinguish between Change in quantity and Change in demand ?

We will add more question soon

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