Write short notes:
2. Types of demand
ANSWER:
The following are the various types of demand.
i. Direct demand - Demand for goods that are meant for direct consumption is known as direct demand. For instance, goods like clothes and food have direct demand, as they are meant for final consumption.
ii. Indirect demand - When goods are in demand so that they can be used in the production of some other commodity, it is called indirect or derived demand. For instance, factors of production have indirect demand, as they are used in the production of goods meant for final consumption.
iii. Joint demand - Two or more goods are said to have a joint demand only when these goods are demanded together to satisfy a single want. For instance, pen and ink are demanded together; therefore, they have a joint demand.
iv. Composite demand - It refers to the demand for commodities that are used to satisfy various wants at the same time. For instance, water is used for satisfying several wants.
v. Competitive demand - It refers to the demand for goods that face high competition from their close substitutes, for instance, Coke and Pepsi.
