What are the determinants of demand?
Determinants of Demand... The quantity demanded for any particular commodity either increases or decreases with the passes of time due to change in several factors which are called determinants of demand. Major determinants of demand are explained below: 1 . Price of commodity : Other things being equal, the demand of a commodity is inversely related to its price. It implies that a fall in the price of a commodity leads to an increase in the purchasing power of the consumer and then increases the demand for a commodity and vice versa. Suppose, a consumer has Rs.40 and he spends his entire income on consumption of X goods. Then, When, Px= Rs.4, Dx= 10 kg Px= Rs.2, Dx= 20 kg Px= Rs.8, Dx= 5 kg 2. Price of related goods C omplementary goods : Complementary goods are those good...