Types of Demand

Basically demand maybe classified into five types, which are as follows:-

1) Direct Demand :

The demand for final goods is called direct demand. Final product

s/goods means the commodity which is directly consumed to satisfy human wants. For example bread, fruits, sugar, etc. Direct demand can be classified further into three kinds :

a ) Price Demand :

It shows the relationship between price and quantity demanded for a commodity. Other things remaining same, i.e. higher demand at lower price and lower demand at higher price. So, price demand leters to the various quantity of goods and services which would be purchased by a consumer at various prices in a given period of time, other things remaining the same .

b ) Income Demand :

It shows the relationship between income of the consumer and quantity demanded for a commodity, other things remaining same, i.e.

higher the demand at higher income and lower the demand at lower income. Income demand refers to the various quantity of goods and services that would be purchased by a consumer at various level of income in a given period of time, other things remaining the same

c) CrossDemand :

It shows the relationship between demand commodity and the price of its related goods .

Cross demand refers to the various quantities of commodity, which will be purchased by a consumer respect to the change in price of it's related goods, other things remaining the same . There are types of related goods:

i) substitute goods , and
ii ) complementary goods

II) Indirect/ Derived Demand :

Indirect demand refers to the demand for the factors of production  ehich are used to make final product. For example demand for brick, cement, iron, wood, labour, raw materials, etc .

III) Joint Demand:

The are several goods which are demanded for joint purposes, such types of demand is called joint demand. For example pen and ink, bike and petrol, etc.

IV) Composite Demand :

There are certain goods which are demanded for several uses. For example, demand for electricity, demand for water, etc. The demand for such commodity is called the composite demand .

V) Competitive Demand :

When the goods are close substitute with each other, the demand for such goods is called competitive demand. In this case, the demand for one good will be change when the price of another good changes. For example, demand for coke and pepsi are competitive demand.

Chapter 2 Part 2