Demand refers to the consumer’s desire to buy goods and services and without any hesitation pay a price for it. In a simplified manner, demand can be considered as the number of goods that the customers are ready and willing to buy at several prices during a given time frame. In terms of the cost, benefits, profit and other variables preferences and choices are the basics of demand.
Types of Demand
- Price demand- The various types of quantities of goods or services which a customer will buy at a coated price and given time, considering other things remain constant is referred to as price demand.
- Income demand- The various types of quantities of goods or services that a customer buys at different stages of income, considering other things remain constant is referred to as income demand.
- Cross demand- The product’s demand doesn’t depend on its own cost but depends on the cost of the other related commodities is called cross demand.
- Direct demand- When the goods or services satisfy an individual’s wants directly is called direct demand.
- Derived demand or Indirect demand- The goods or services that are demanded or needed for manufacturing goods and satisfy the consumer directly is called derived demand.
- Joint demand-To produce a product one needs many things that are related to each other. For example, to produce a cake, one needs services like an oven, fuel, flour mill, etc. Hence, the demand for other additional things to produce a product is referred to as joint demand.
- Composite demand-When the goods and services are utilized for more than one cause is called composite demand. Example- Coal.