Kinds of Demand

The following are the types of demand:

• Price Demand

Price demand expresses a relationship between price and quantity demanded. It refers to the various quantities of a commodity that a consumer would purchase at its different prices at a given time, keeping all other things constant. The quantity demanded increases with the fall in price and falls with the rise in price.

• Income Demand

Income demand expresses the relationship between income and demand, keeping all other things constant. It refers to the various quantities of a commodity that would be purchased by a consumer at different level of income. The relationship between the income of the consumer and his demand is positive, i.e. the demand increases with the increase in demand and vice-versa.

• Cross Demand

Cross demand expresses the relationship between the demand for one commodity, say X and the price of the related commodity, say Y. It indicates how much quantity of X commodity will be demanded at different prices of Y commodity, without any change in the price of X commodity.

• Direct Demand

Direct demand refers to the demand for a commodity not for its direct consumption to satisfy a human want directly. For example, the demand for a car is a direct demand and it satisfies the final consumption demand.

• Derived Demand

Derived demand refers to the demand for a commodity not for direct satisfaction but making final product. It is also called indirect demand. Derived demand depends upon direct demand. For example, the demand for a building is a direct demand and the demand for bricks, cement, rod, wood, etc. required to make the building are known as the derived demands.

• Joint Demand

It is also known as complementary demand. Joint demand refers to that demand when two or more commodities are demanded together to satisfy a common want. For preparing tea, we need milk, sugar and tea leaves.

• Composite Demand

Composite demand refers to the demand for one commodity which can be put to several uses. For example, milk can be used for making sweet, tea, butter, etc. Therefore, demand for milk is a composite demand.