Discuss three factors influencing demand for …

(a) OWN PRICE OF THE GIVEN COMMODITY

• Own price is the most important determinant of demand.
• When own price of a commodity falls, its demand rises and when own price rises, its demand falls.
• Thus we can say that there is an indirect relation between price of a commodity and its quantity demanded.

(b) PRICE OF RELATED GOODS

• When the price of the substitute goods rises then demand for the given commodity also rises and vice-versa.
• Like, if Price of Maruti Swift increases, demand for i20 will rise.

(c) INCOME OF THE CONSUMER
(i) Normal Goods (Positive relation)

These are the goods whose demand rises with the rise in income. E.g. Basmati Rise

(ii) Inferior Goods (Negative relation)

These are the goods whose demand falls with the rise in income and vice versa. e.g. Low quality rice.

(iii) Necessities:

A third category is also there, necessities, demand for these generally do not change with change in income e.g. life-saving drugs.
(d)TASTE AND PREFERENCES OF THE CONSUMER

• Demand for a commodity is also affected by taste and preferences.
• It rises if there is a favorable change in the taste and preferences of the consumer and vice versa.