Question

State any two factors, other than changes in price which bring about a change in demand.

Answer 1

1. Income of the consumer: As the income of the consumer increases ,his purchasing power increases and therefore the demand of the given commodity increases. Similarly, when the income of the consumer decreases,his purchasing power contradicts and hence the demand of the given commodity decreases.

2. Expecting price in future: when the consumer expects that the price of the given commodity will rise in future, the current demand of the given commodity will increase and if the consumer expects that the price of the commodity will decrease in future, the current demand of the given commodity will also decrease.