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 :
- Individual 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.
- Market 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:
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:
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.
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