JAWAHARLAL NEHRU TECHNOLOGICAL

UNIVERSITY
KAKINADA

School of Management Studies

SUB:Managerial Economics

Presented by Reference
Name:B.R.S.Pavan Managerial Economics
Roll.no:18021E0014 D N Dwivedi
 DEMAND DETERMNANTS

WHAT IS DEMAND ?

DEFINITION:-
Demand is defined as “a desire for a
commodity backed by the ability and willingness to pay for
it.”
Unless a person has adequate purchasing power,
resources and willingness, his desires alone for a commodity
would not be considered as his demand.
DEMAND DETERMINANTS:-
Demand determinant for a
product and the nature of relationship between the
demand and its determinants proves very helpful in
analyzing and estimating demand for a product. It may be
noted that at the very outset that a host factors determine
the demand for a product.
However there are some following factors that
determine the demand for a product.
DEMAND DETERMINANT FACTORS:-
1.Price of the Product:-
The price of a product is one of the most
important determinants of its demand in the long run and the
only determinant in the short run. The quantity of the product
demanded by the consumer inversely depends upon the price
of the product. If the price decreases demand and vice versa.
2.Income of the Consumer:-
Income is the basic determinant of
quantity of product demanded since it determines the
purchasing power of the consumer.
For the purpose of Income Demand Analysis, consumer
goods and services may be grouped under four broad
categories.
1.Essential Consumer Goods
2.Inferior Goods
3.Normal Goods
4.Luxury Goods
3.Price of related Goods:-
The demand for a commodity is
also affected by the changes in the price of its related
goods. Related goods may be substitutes or
complementary goods.
Substitute:- Compliment:-
4.Consumers Taste and Preferences.

5.Consumers Expectations

6.Demonstration Effect

7.Population of the Country

8.Distribution of National Income

THANK YOU