Demand is depend on customer want total quantity customers are willing and able to purchase is called demand.
there are two types of demand.
- Direct demand
- derived demand
- Joint demand
- Competitive demand
- Composite Demand
direct demand are those good and services which satisfy consumers desires.
for example: consumer electronics
Derived Demand/indirect demand
Derived Demand is a that demand which depend on other good or services demand. sometimes we called it intermediate or related good and services.
for example: Cement is demanded due to demand for housing or steel is demanded due to demand for automobiles.
those good and services which are link together when one product demand is increase other product or service demand also increase.
for example: Ink and pen or Petrol and bike. these are the best examples for joint demand.
Those product/services which are close substitute of each other are called Competitive demand.
for example: tea and coffee
Composite demand define those good or services which are use for multi-purposes are called Composite demand.
for example: Milk and electricity
Law of Demand:
law of demand state that when price will increase, demand will be decrease. when price will decrease , demand will be increase.
logic’s behind the law:
when price will be increase some people lose purchasing power and some people go for substitute product/service.
The quantity supplied is the number of units that seller want to sell over a specific period of time at a particular price.
In simple words the total products (goods or services) available for purchase at any specific price is called supply.
Law of Supply:
Law of supply state that all other factors remaining unchanged the supply of a good increase when price is increase.