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TYPES OF DEMAND

Updated on March 9, 2011

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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    • profile image

      Albert Adekanye 

      2 weeks ago

      Thanks For Ur Help

    • profile image

      Nakul 

      3 weeks ago

      There are 9 kinds of demand

    • profile image

      Kitty Pearl 

      2 months ago

      wow!....really love your explanation, its easy to understand...Thank u

    • profile image

      James Tolufashe 

      2 months ago

      Easy explanation

    • profile image

      Dahiru abubakar sokoto 

      6 months ago

      Thanks for your help

    • profile image

      salihu seidat oyiza 

      6 months ago

      is good to know

    • profile image

      adedigba abraham 

      9 months ago

      very good explanation easy to comprehend

    • profile image

      James Kabete 

      10 months ago

      Excellent explanation and relevant examples. Very pleasing.

    • profile image

      Mbugua John 

      12 months ago

      Actually grateful for the good explanation

    • profile image

      Atta sale 

      16 months ago

      Good explanation

    • profile image

      Antony kariuki 

      17 months ago

      great explanation it couldn't

      have been made any simpler.

    • profile image

      Jabir 

      18 months ago

      Thanks

    • profile image

      Paul 

      22 months ago

      Thanks very much i nw understand the types of demand

    • profile image

      favourite 

      22 months ago

      Thanks a lot.

    • profile image

      shallom 

      2 years ago

      It is indeed self explanatory, tanks alot

    • profile image

      rabi 

      2 years ago

      Wow good explaination n understanding

    • profile image

      Olasunkanmi 

      2 years ago

      Dat Gud

    • profile image

      halimat sadiya musa 

      2 years ago

      definitely I relay understand that,thanks a lot.

    • profile image

      Edna 

      2 years ago

      Thank you very much very educative

    • profile image

      gitari naxhon 

      2 years ago

      thanks very much for the service .

    • profile image

      Adam sabo sagagi 

      2 years ago

      Thank i undastand now

    • profile image

      babalola taofeek 

      2 years ago

      tanks i understand nw

    • profile image

      Tijjani wangara 

      2 years ago

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

    • profile image

      Usman (Lipsey) 

      2 years ago

      Thanks you made me well understood.

    • profile image

      Usman (Lipsey) 

      2 years ago

      Thanks you made me well understood.

    • profile image

      Prince thankgod 

      2 years ago

      How many types of demand do we have

    • profile image

      mohammed asmin said 

      2 years ago

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

    • profile image

      Jeremiah 

      2 years ago

      I like dis keep itup thanks Add Your Comment...

    • profile image

      Priscilla 

      2 years ago

      good good job.

    • profile image

      Dormenyo 

      2 years ago

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      LeX Ebenezer 

      2 years ago

      Thanks....y0u've really helped al0t 0f pe0ple....keep it up!

    • profile image

      Muntasir And kabiru 

      2 years ago

      I really appreciate you for providing this types.

    • profile image

      Victtoro Jr 

      2 years ago

      Thanks. This is all the better explanation I needed.

    • profile image

      DO ME 

      2 years ago

      dats c a nyc explanation it has helped me

    • profile image

      francis ayindago 

      3 years ago

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

    • profile image

      Emmanuella 

      3 years ago

      This has really helped me in my project.

    • profile image

      blessing 

      3 years ago

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

    • profile image

      sophia 

      3 years ago

      thank you for your help that is great and nice I love that

    • profile image

      Isha jalloh 

      3 years ago

      wonderful explanation

    • profile image

      Isha jalloh 

      3 years ago

      wonderful explanation

    • profile image

      Angela Gaitho 

      3 years ago

      Dats so excellent May God bless u

    • profile image

      witty 

      3 years ago

      Tanx for ur good explanation it really helped me

    • profile image

      d-klitZ 

      3 years ago

      thanks for more explanation on .demand nd supply

    • profile image

      Kpelai derek 

      3 years ago

      Thanks For the comprehensive types of demands and explanation.

    • profile image

      Kpelai derek 

      3 years ago

      Thanks For the comprehensive types of demands and explanation.

    • profile image

      sayilnen Ngas 

      3 years ago

      thx a lot,i fund it very useful,i now understand

    • profile image

      Upright koke 

      3 years ago

      Thnx, is very short n clear. Pick it up. God bless u

    • profile image

      Jennifer 

      3 years ago

      thanks nice one, now i understand the types of demand

    • profile image

      patience 

      3 years ago

      Thank for ur understanding.

    • profile image

      bygone 

      3 years ago

      Is a good ideal

    • profile image

      Damilola 

      3 years ago

      I also thank u very much please keep it up, now I understand it soooo much

    • profile image

      Sakwe nabamba 

      3 years ago

      Add Your Comment..well elaborated

    • profile image

      Otuan Esther 

      3 years ago

      Thanks. Its very understandable. I enjoyed it. Keep it up.

    • profile image

      towett Dickson 

      3 years ago

      thanks for clarification

    • profile image

      joy 

      3 years ago

      Clearly explained.Thanks

    • profile image

      mike g 

      3 years ago

      Comprehensive explanations tanx a lot

    • profile image

      shaheen alom 

      4 years ago

      thnxx lot

    • profile image

      Josephine Quartey 

      4 years ago

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

    • profile image

      Elume Ebou David 

      4 years ago

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

    • profile image

      philip 

      4 years ago

      Thanks for explaning it to my understanding

    • profile image

      kayongo joseph 

      4 years ago

      Thx a lot

    • profile image

      rishav 

      4 years ago

      quite helpful for my project . Thank you

    • profile image

      SYLVESTER NWEKE 

      4 years ago

      THANKS FOR YOU EXPLANATION

    • profile image

      Jonny 

      4 years ago

      Wonderful explanation!

    • profile image

      Temmy 

      4 years ago

      Ds i̶̲̥̅̊s so explanatory! God bless u

    • profile image

      stephen 

      4 years ago

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

    • profile image

      Evance Gozibert 

      4 years ago

      Wonderful, my teacher failed to do this.

    • profile image

      swati 

      4 years ago

      thanks for providing help

    • profile image

      philomina 

      4 years ago

      Thanks for providing this services.

    • profile image

      Kamilu sanusi 

      4 years ago

      I understand the type of demand, thanks you.

    • profile image

      aneth 

      5 years ago

      weldone it is nice to read i understood.

    • profile image

      nadia zuberi 

      5 years ago

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

    • profile image

      MORRIS 

      5 years ago

      ITS A NICE ONE

    • profile image

      Faith .i. 

      5 years ago

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

    • profile image

      kennedy 

      5 years ago

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

    • Chrisagbe profile imageAUTHOR

      Chrisagbe 

      6 years ago

      Thanks Sharon for taking time to read

    • profile image

      Sharon 

      6 years ago

      This is a nice explanation,keep it up.

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