Question

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Posting Opportunity: Micro News Story or Micro Topic of Your Choice (Wk 4) No message

Answer 1

Micro topic chosen - Demand

What is demand ?

• Demand in Economics states the desire of consumers to purchase the specific good or services and their willingness to pay that desire goods and services

What is law of demand?

• Law of demand states that other thing remaining constant, when the price of good increases the quantity demanded for that specific good decreases and when the price of good decreases then the quantity demanded for that specific good increases

What ia individual demand?

• Individual demand is the demand for one particular firm or individual. It represents an individual buyer who purchases the specific quantity of goods at specific point of time

What is market demand?

• Market demand is the demand of all the buyers in the market. It represents how every buyer want to purchase the specific quantity of goods at specific price and at specific point of time

Factors affecting demand -

• Income - Higher will be the income of the consumers,higher will be the demand for market commodity.
• Future expectations - If a consumer expects that price of a certain commodity will increase in future , then he will buy that commodity today leading to increase in demand and vice versa
• Substitute goods - Substitute goods states that when the price of a good increases then demand the demand for its substitutes good increases. Examples tea and coffee
• Complementary goods - Complementary goods states that when price of a good increases then the demand of it will decrease which will also result in fall in demand of its complementary goods .For example car and petrol
• Weather - Demand of some goods increases on the basis of weather . For example demand of Air conditioner increases in summer while decrease in winter

Demand in case of inferior goods-

• Inferior goods is the goods whose demand decreases when the income of the consumers increases. Example - canned soup

Demand in case of normal goods

• Normal goods are those goods whose demand increases when the income of the consumers increases. Example - whole wheat