Explain any three factors that affect the demand for a commodity.
Three determinants of demand:
- Price of the commodity: With constant money income of the consumer and an increase in the price of a commodity, the purchasing power of the consumer reduces and vice versa. Thus, the consumer purchases less of a commodity with an increase in its price.
- Income of the consumer: Other things remaining constant, an increase in the individual income would mean an increase in the purchasing power of the consumer. Thus, the consumer can purchase commodities with an increased income.
- Climatic condition: During the winter season, the demand for woollen clothes increases. During the summer season, the demand for cotton clothes increases. Hence, the climatic condition affects the market demand for a commodity.
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Solution Explain Any Three Factors that Affect the Demand for a Commodity. Concept: Elasticity of Demand and Elasticity of Supply.