In this article, you will discover types of demand. Demand is concerned with consumer behavior.
In economics, demand means a desire which is backed by a willingness and capacity to pay.
Demand = Desire + Willingness to Pay
For example, If shiv has the desire to purchase a television set but does not have the capacity to pay then it will simply be a desire and not a demand. All desires are not demand.
Definition: According to Benham, “the demand for anything at a given price is the amount of it, which will be bought per unit of time at that price.”
Types of Demand
1. Direct Demand:
A demand which satisfies consumer wants directly. They serve the direct consumption needs of the consumers. Thus direct demand is for consumer goods.
Remember: Consumers have direct demand
Example: Demand for sugar, cloth
2. Indirect Demand:
Indirect demand is also known as derived demand. Demand for goods that are required for further production is known as indirect demand. All factors of production i.e land, labor, capital, entrepreneur have indirect demand.
Remember: Factors of production have indirect demand.
Example: Demand for workers in a mobile factory is indirect demand.
3. Complementary/Joint Demand
When more than one good is demanded together to satisfy single want, it is known as complementary or joint demand.
Remember: To satisfy single want more than one good
Example: Car and tyre, Bike and petrol
4. Composite Demand
The fourth type of demand is composite demand. Composite demand is opposite to complementary goods. Here the demand for a commodity that can be put to several uses is called composite demand.
Remember: To satisfy single want is used.
Example: Electricity is demanded several uses as fan, light, television, etc.
5. Competitive Demand
The last type of demand is competitive demand. It is demand for goods which are alternate for each other.
Remember: Substitute for each other.
Example: Sugar or jaggery, vada-pav or samosa
So, friends, these were the types of demand and I hope you have understood them clearly. But still, if you see any need in this post, then please give your view in the comment box and help us to improve that deficiency, thanks.
FAQ
What is demand?
Demand means a desire which is backed by a willingness and capacity to pay.
What is direct demand?
A demand which satisfies consumer wants directly is called direct demand.
What is complementary demand?
When more than one good is demanded together to satisfy single want is called complementary demand.
Reference post
READ MORE-