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Tuesday, November 15, 2016

Demand in Economics

Chapter-2 Demand


Demand: 

In General science, Demand means willingness to get something are eagerness to get something.

In Economics sense,
  1. Willingness or eagerness to get something 
  2. Ability to pay
  3. Definite plan to buy something 

Factor / Determinants of affecting Quantity Demand: 

  1. Price of the Commodity 
  2. Income
  3. Price of related goods (pre)
    •  They are mainly two types:
      1. Complementary goods : 
        One is depend to other element which known as a complementary goods.
         e.g.,
        • Mobile battery
        • Car- petrol
        • Machine - Oil etc.

        The relationship between price and quantity demand is always negative for complementary goods.  
      2. Substitute goods:   
        Substitute goods are two goods that could be used for the same purpose. If the price of one good increases, then demand for the substitute is likely to rise. Therefore, substitutes have a positive cross elasticity of demand.







  • Substitute goods characteristics
  • Expected Future Price
  • preferences



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