Q.Explain any four types of demand.
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Start your 14-day free trial to unlock the full solution →Goods are demanded for different reasons, so demand is classified into types such as direct, derived, complementary and composite demand. Below are four important types with their meaning and an example.
1. Direct demand: This is the demand for goods that satisfy a human want directly, i.e. consumer goods. For example, the demand for food, clothing or a mobile phone arises because these goods themselves give satisfaction to the consumer.
2. Derived (indirect) demand: This is the demand for a good that arises not for its own sake but because it is needed to produce some other good. For example, the demand for cotton is derived from the demand for cloth, and the demand for labour is derived from the demand for the product it helps to make.
3. Complementary (joint) demand: When two or more goods are wanted together to satisfy a single want, they are said to be in joint demand. A rise in demand for one raises demand for the other — for example, car and petrol, or pen and ink.
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