DEMAND AND ITS DETERMINANTS Sudhit Sethi

Demand Demand refers to that particular quantity of commodity that a consumer is willing to and able to purchase at a particular price. A careful analysis of determinants of demand is very useful to a Firm because it enables the Firm to forecast its sales and adjust the production accordingly.

Main determinants of Demand are as follows: Price of Commodity Price of Related Goods Income of Consumer Tastes & Preferences of Consumer Change in Population Climatic Conditions

Conclusion All the determinants of Demand are very important. A Business Firm should have knowledge and information about all these factors in order to finalize its own production and marketing strategies. Firm should not ignore any of the factors determining Demand as it may lead to incorrect forecast of Sales.

References Business Economics - M.M Gupta Macroeconomic Policy Environment – Shyamal Roy Macroeconomics – Dornbusch & Fischer