Question

State six factors that can cause and 'increase' in demand of a commodity.

Answer 1

The factors causing an increase in demand of a commodity are :

(i) Rise in the price of substitute goods.

(ii) Fall in the price of complementary goods.

(iii) Rise in income of its buyers (in case of a normal good).

(iv) Fall in income of its buyers (in case of an inferior good).

(v) Favourable change in teste etc for the good.

(vi) Increase in the number of its buyers.