Answer to Question #250237 in Economics for K K

Question

What do you mean by determinants of demand. How do the changes in following factories

affect the demand for a commodity:

a) Price

b) Income

c) Advertisement

d) Population

e) Price of the substitute

Answer 1

1) With an increase in price, the demand for a product decreases, and vice versa, a decrease in price leads to an increase in demand.

2) The growth in income provokes increasing in demand, income decline leads to a demand downturn.

3) Advertisment stimulates demand.

4) The age, gender structure of a population determines the demand for particular groups of products/ For example, cosmetics for young women, games for kids.

5) Increase in the price of the substitute leads to an increase in demand.