Introduction:

The term demand is different from desire, want; wish etc. In economics the concept demand has different meaning. Any want or desire will not constitute demand. Demand refers to the total or a given quantity of a commodity that are purchased by a consumer in the market at a particular price at a particular time. The other aspects of demand are as follows. Demand is always at price, It should be always expressed in terms of specific quantity, It always created in the market and It is relative to a person, place and time. Demand is desire to buy plus willingness to pay plus ability to pay. The determinants of demand are as follows.

Determinants or factors of demand:

Demand for a commodity or service is determined by number of factors all such factors are called as demand determinants

1. Price of the given commodity: Price of the commodity which is based on cost of production determine the quantity to be purchased by the consumer generally higher the price lower would be the demand and vice versa.
2. Quality of the product: Super quality goods normally command higher price and generally it is demanded by particular segment of the society. ordinary goods are usually cheaper and are demanded by common people.
3. Improvement in educational standards: Demand for goods like TV sets, music computers and other such electronic goods will go up with higher education standards.
4. Inventions and innovations: Development of new product will affect the demand for old product.
5. Technology changes and its impact on production: Technology improvement minimize cost of production and maximum output, hence a firm can sell at a lower price.
6. Profit margin: Higher profit margin leads to higher price and lower demand and vice versa.
7. Price of substitute or complements: Most of the commodities have either substitute or compliment. When price of these articles rise, the demand for a given commodity increases. This is because now the commodity has become cheaper in terms of its related goods.
8. General Price level: There will be greater demand for goods and services in case of lower price level and high price level.
9. Future trend in price: When people anticipate future rise in price, the current demand would go up on the contrary people buy less if they expect future fall in price.
10. Size and growth of population and its composition: A large population with the higher rate of growth creates greater demand for goods and services, the age structure and sex ratio and composition of the population determines also the nature and types of goods and services demanded in a society.
11. Consumers taste and preference etc.: A change in taste, customs and habits traditions and styles of people fashions of the day etc. Profoundly affect and alter the demand for goods and services in any society.
12. Weather and climatic condition: There will be greater demand for goods like ice cream, cold drink etc. during summer and large demand for hot drink like coffee, tea and milk etc. during winter.
13. Conditions of trade economy: Condition existing in a particular period of time affects the demand for goods during the period of prosperity more goods are demanded where as lower quantities purchase during the recession and depression.
14. Level of saving and pattern of expenditure and taxation: Higher saving would reduce current demand vice versa. The taxation policy of country can either curb consumption or stimulates the level of consumption in an economy.
15. Supply of money in circulation: Larger supply of money in circulation higher would be the demand for goods and vice versa.

also read: explain the types of demand.