Answer to Question #309025 in Microeconomics for bez

Question

what is demand and what are types of demand

Answer 1

Demand

Is the quantity of consumers who are willing and able to buy products at various prices during a given period of time. Demand for any commodity implies the consumers' desire to acquire the good, the willingness and ability to pay for it.

Types of demand

1. Individual Demand and Market Demand:

The individual demand refers to the demand for goods and services by the single consumer, whereas the market demand is the demand for a product by all the consumers who buy that product. Thus, the market demand is the aggregate of the individual demand.

2. Total Market Demand and Market Segment Demand:

The total market demand refers to the aggregate demand for a product by all the consumers in the market who purchase a specific kind of a product. Further, this aggregate demand can be sub-divided into the segments on the basis of geographical areas, price sensitivity, customer size, age, sex, etc. are called as the market segment demand.

3. Derived Demand and Direct Demand:

When the demand for a product/outcome is associated with the demand for another product/outcome is called as the derived demand or induced demand. Such as the demand for cotton yarn is derived from the demand for cotton cloth. Whereas, when the demand for the products/outcomes is independent of the demand for another product/outcome is called as the direct demand or autonomous demand. Such as, in the above example the demand for a cotton cloth is autonomous.

4. Industry Demand and Company Demand:

The industry demand refers to the total aggregate demand for the products of a particular industry, such as demand for cement in the construction industry. While the company demand is a demand for the product which is particular to the company and is a part of that industry. Such as demand for tyres manufactured by the Goodyear. Thus, the company demand can be expressed as the percentage of the industry demand.

5. Short-Run Demand and Long-Run Demand:

The short term demand is more elastic which means that the changes in price or income are reflected immediately on the quantity demanded. Whereas, the long run demand is inelastic, which shows that demand for commodity exists as a result of adjustments following changes in pricing, promotional strategies, and consumption patterns.