There are four types of demand namely Competitive Demand, Joint or Complementary Demand, Composite Demand and Derived Demand. Demand is the amount of a product buyers are willing and able to purchase at a given price over a particular period of time.

a. Competitive Demand

Commodities are substitutes if one can be used in place of the other. Substitute goods serve the same purpose and therefore compete for the consumers’ income. They are said to have competitive demand because of the fact that they compete for the consumers’ income. Examples of substitute goods are Milo and bournvita, butter and margarine and others. A change in the price of one affects the demand for the other. If for instance there is an increase in the price of butter, demand for margarine will increase which will ultimately increase the price of margarine, provided the supply of margarine does not change. On the other hand a decrease in the price of butter will lead to a decrease in the demand for margarine, and hence a fall in its price, given the supply.

b. Joint or Complementary Demand

Two or more goods are said to be jointly demanded when they must be consumed together to provided a given level of satisfaction. Some examples are cars and fuel, compact disc players and CD. There are perfect complementary goods and imperfect or poor complementary goods. For perfect complementary goods, the consumer practically cannot do without the other. An example is cars and fuel. On the other hand, for imperfect complementary goods, a consumer can do without the other, so long as a substitute is obtained. For complementary demand, a change in the price of one good affects the demand for the other. If there should be an increase in the price of compact disc players, there will be a decrease in the demand for discs, other things being equal.

c. Derived Demand

When the demand for a commodity is derived from the demand for the final commodity, that commodity is said to have derived demand. Wood may be demanded for the purpose of manufacturing furniture and not for its own sake. Here, the demand for wood is derived from the demand for furniture. Demand for wood is therefore a derived demand.

Factors of production such as land, labor, and capital have derived demand. This is because an increase in the demand for a commodity will result in an increase in the factors of production used in producing the goods. The price of the factors of production will increase, other things being equal.

d. Composite Demand

Composite demand applies to commodities which have several uses or are demanded for several and different purposes. Wood as mentioned in the example above is used for furniture – tables, chairs, beds, windows, doors and others. A change in demand for one of them will affect all others. If there is an increase in demand for table this will result in higher prices being paid for wood. The high price for wood will increase the cost of production of chairs, bed, windows and doors and any other thing for which wood is used in manufacturing

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Comments 66 comments

Sharon 4 years ago

This is a nice explanation,keep it up.

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Chrisagbe 4 years ago Author

Thanks Sharon for taking time to read

kennedy 4 years ago

this is good,it has helped me a lot.thanx

Faith .i. 3 years ago

It gave me a better understanding about types of demand.thanks on your good work

MORRIS 3 years ago


nadia zuberi 3 years ago

its fantastic keep it upand continue writing so many other articles like this

aneth 3 years ago

weldone it is nice to read i understood.

Kamilu sanusi 3 years ago

I understand the type of demand, thanks you.

philomina 3 years ago

Thanks for providing this services.

swati 3 years ago

thanks for providing help

Evance Gozibert 3 years ago

Wonderful, my teacher failed to do this.

stephen 3 years ago

in composite demand what if the commodity has no production for many.

Temmy 2 years ago

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Jonny 2 years ago

Wonderful explanation!



rishav 2 years ago

quite helpful for my project . Thank you

kayongo joseph 2 years ago

Thx a lot

philip 2 years ago

Thanks for explaning it to my understanding

Elume Ebou David 2 years ago

Thanks for the knowledge, wisdom and understanding may the almighty God continue to impact you with more!

Josephine Quartey 2 years ago

Tnx for the explanations n examples cos I got them now.

shaheen alom 2 years ago

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mike g 2 years ago

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joy 2 years ago

Clearly explained.Thanks

towett Dickson 23 months ago

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Otuan Esther 23 months ago

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Sakwe nabamba 23 months ago

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Jennifer 21 months ago

thanks nice one, now i understand the types of demand

Upright koke 20 months ago

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sayilnen Ngas 20 months ago

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Kpelai derek 20 months ago

Thanks For the comprehensive types of demands and explanation.

Kpelai derek 20 months ago

Thanks For the comprehensive types of demands and explanation.

d-klitZ 20 months ago

thanks for more explanation on .demand nd supply

witty 20 months ago

Tanx for ur good explanation it really helped me

Angela Gaitho 20 months ago

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Isha jalloh 20 months ago

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Isha jalloh 20 months ago

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sophia 20 months ago

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blessing 19 months ago

...thanks for the idea you created in me.

Emmanuella 19 months ago

This has really helped me in my project.

francis ayindago 17 months ago

it help me alot in teaching demand and supply to my students. tanx a lot

DO ME 17 months ago

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Victtoro Jr 16 months ago

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Muntasir And kabiru 16 months ago

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Jeremiah 15 months ago

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mohammed asmin said 15 months ago

tx well explained ooooh, keep it up!~!!!!

Prince thankgod 15 months ago

How many types of demand do we have

Usman (Lipsey) 15 months ago

Thanks you made me well understood.

Usman (Lipsey) 15 months ago

Thanks you made me well understood.

Tijjani wangara 12 months ago

i am proverbaly understood, may Allah give opportunity to write mpre than that

babalola taofeek 12 months ago

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Adam sabo sagagi 12 months ago

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Edna 12 months ago

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halimat sadiya musa 12 months ago

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Olasunkanmi 11 months ago

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rabi 11 months ago

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shallom 10 months ago

It is indeed self explanatory, tanks alot

favourite 3 months ago

Thanks a lot.

hammad awan 3 months ago

any one who tell me the 5 type of demand

Paul 3 months ago

Thanks very much i nw understand the types of demand

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