Question

Give a brief classification of demand.

Answer 1

1) Price demand measures the ratio between proportionate change of quantity demanded of a good and proportionate change in price.

2) Income demand measures the ratio between proportionate change of income of the consumer and proportionate change in quantity demanded of a commodity.

3) Cross demand measures the ratio between proportionate change of quantity demanded of one good and proportionate change in price of another commodity.

4) Joint demand is possessed by those goods which are demanded at the same time.

5) Composite demand is possessed by those goods which have more than one use. For example, milk is used for making several food items like, cheese, curd, ghee, etc.

6) Derived demand is possessed by those goods which is caused because of demand of another good. For example, for making a leather bag, leather is needed so demand for leather is an example of derived demand.