what is market demand for a good.name the factors determining the market demand
Harshita,
Market demand is the aggregate of all individual consumer demand for a commodity in a market during a particular period of time.
Determinants of Market Demand are as follows.
a. Market Price of the commodity - Market demand for a commodity is negatively related to the market price of the commodity. This implies that, other things remaining constant, as the market price of a good rises (or falls), the quantity demanded of the good falls (or rises).
b. Market Price of related goods - Market demand for a good also depends on the market price of other goods (i.e. related goods). Any two goods are considered to be related to each other, when the demand for one good changes in response to the change in the market price of the other good.
c. Income of the consumer - Change in the income of the consumer also affects the market demand for goods. For normal goods, an increase in income leads to an increase in market demand, while for inferior goods, an increase in income leads to a fall in market demand for the good.
d. Taste and Preferences of Consumers - If all the consumers prefer a commodity over other, then the market demand for that commodity increases. While, if all the consumers dislike a commodity, then its market demand falls.
e. Distribution of Income - If distribution of income in a society is fair and equal, then demand for a commodity is more compared to a situation with unequal distribution of income.
f. Population Size - Market demand is positively related to the population size. This implies that an increase in the population size increases the market demand of a commodity and a decrease in population decreases the market demand of a commodity.
We would advice you to not to keep on piling your questions, rather, you should keep posting 1 to 2 questions per subject (Accountancy, Economics and Business Studies) on everyday basis. Ideally, you should go through the study material that is available on our website and look for the answers to the questions. This will not only help you to enhance your analytical abilities but also will help you to learn the application of your knowledge. In this manner, you will gain confidence and will help you in evaluating your preparation.
Market demand is the aggregate of all individual consumer demand for a commodity in a market during a particular period of time.
Determinants of Market Demand are as follows.
a. Market Price of the commodity - Market demand for a commodity is negatively related to the market price of the commodity. This implies that, other things remaining constant, as the market price of a good rises (or falls), the quantity demanded of the good falls (or rises).
b. Market Price of related goods - Market demand for a good also depends on the market price of other goods (i.e. related goods). Any two goods are considered to be related to each other, when the demand for one good changes in response to the change in the market price of the other good.
c. Income of the consumer - Change in the income of the consumer also affects the market demand for goods. For normal goods, an increase in income leads to an increase in market demand, while for inferior goods, an increase in income leads to a fall in market demand for the good.
d. Taste and Preferences of Consumers - If all the consumers prefer a commodity over other, then the market demand for that commodity increases. While, if all the consumers dislike a commodity, then its market demand falls.
e. Distribution of Income - If distribution of income in a society is fair and equal, then demand for a commodity is more compared to a situation with unequal distribution of income.
f. Population Size - Market demand is positively related to the population size. This implies that an increase in the population size increases the market demand of a commodity and a decrease in population decreases the market demand of a commodity.
We would advice you to not to keep on piling your questions, rather, you should keep posting 1 to 2 questions per subject (Accountancy, Economics and Business Studies) on everyday basis. Ideally, you should go through the study material that is available on our website and look for the answers to the questions. This will not only help you to enhance your analytical abilities but also will help you to learn the application of your knowledge. In this manner, you will gain confidence and will help you in evaluating your preparation.