Introduction and type of DEMAND and GOODS.
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This document provides an introduction to demand, defining it as the quantity of a commodity a consumer is willing and able to purchase at a given price over a period of time. It then describes the different types of demand, including autonomous vs derived demand, industry vs company demand, and joint vs rival demand. The document also distinguishes between consumer goods and producer goods, durable vs non-durable goods, perishable vs non-perishable goods, inferior vs superior goods, luxury goods, prestige goods, and complementary goods.
Introduction and type of DEMAND and GOODS.
- 1. INTRODUCTION TO DEMAND Made By– Animesh Sachan.
- 3. DemanD? “Demand for a commodity refers to a quantity of a commodity which a consumer is willing to buy at a given price in a given period of time. ” Demand = Desire + Ability to pay + Willingness to spend Demand is a relative concept – not absolute It is related to price , time and place. “The demand for a commodity refers to the amount of it which will be bought per unit of time at a particular price ( in a particular market)”.
- 4. Types of DemanD 1. Autonomous and Derived Demand. 2. Industry and Company Demand. 3. Joint and Rival Demand.
- 5. Autonomous and derived Demand- Autonomous demand refers to the demand for a product which is wanted for itself . EXAMPLE- Demand of food , clothes etc. Derived demand is derived from other direct demands. EXAMPLE- Demand for a plot is direct demand but demand for bricks is derived demand.
- 6. Industry and Company Demand- Industry demand is the total demand for a product for a particular industry. EXAMPLE- Total demand of a two wheeler. Demand of any particular Brand is the Company Demand. EXAMPLE- Demand for Honda.
- 7. Joint and Rival Demand- When the goods are used together to satisfy a particular bond known as Joint demand. EXAMPLE- It is no good having a printer without the ink to go with it. Similarly ink cartridges are no use without a printer. Rival demand refers to the case of product which is determined for two or more purposes. EXAMPLE - Cement.
- 8. Different types of goods.
- 9. Consumer Goods and Producer Goods Goods used for final Consumption are called Consumer Goods Eg. Food, Home, Car Goods used for production of other goods are called Producer Goods Eg. Plants, Machinery, Factory
- 11. Non-durable goods According to Layman, goods perishable after use are called non-durable goods Later new economics definition came ; non- durable goods are goods perishable after one use .Eg. Bread, Milk, Purchased at regular intervals Only current demand to be met corresponding to current conditions Serviceability not generally required Classified into perishable and non perishable goods
- 12. Perishable and non Perishable goods Perishable goods are lost after a period of time Eg. Teaching Services, Doctor’s service, Medicines Non-perishable goods are not lost after a period of time Eg. Coal
- 13. Durable Goods Goods being used for a continued period of time. Eg.TV, refrigerator It either satisfies new demand or replace old set. Requires special facilities to use. Eg. Car needs Petrol Pump, Refrigerator needs Electricity. Consumed by more than one person.Eg. TV, Radio Serviceability is required. So segregation of new demand and service required Demand analysis is heavily complex
- 14. Inferior Goods and Superior Goods Inferior goods are goods whose demand decreases as income increases. It has negative elasticity of demand Eg. A Man who had a recent hike in salary pay less on cheap dress. Superior gods are goods whose demand increases as income increases It has high positive elasticity of demand
- 15. Luxury goods In economics, a luxury good is a good for which demand increases more than proportionally as income rises. It has a high elasticity of demand Their quality, durability or performance that are remarkably superior to the comparable substitutes Eg. Gold ornaments Needs good Brand Power With time can assume status of normal goods
- 16. Prestige goods Goods which ascribe high status and value Eg. Antique Collections, Limited Edition Goods Bought by richest section of people
- 17. Complementary Goods A good's demand is increased when the price of another good is decreased. It has negative cross elasticity of demand Eg. Pencil and Eraser consumption in case of a accounting firm.