Topic Content:
- Factors that Determine Demand for Commodities
- Evaluation Questions
Below are Factors that Determine Demand for Commodities;
1. Price of the Commodity:
In a situation where there is an increase in the price of goods, the demand for it falls. The price of the commodity determines the quantity demanded. The higher the price, the lower the quantity demanded.
2. The Level of Consumers’ Income:
Consumers’ income determines the quantity demanded. The higher the income level, the higher the quantity of goods purchased and vice versa.
3. Tastes and Preferences of the Consumers:
The interest of consumers in a particular product results in an increase in demand for it. The taste of consumers changes with time, and this influences the level of demand. If a consumer’s taste changes in favour of a given commodity, definitely, more of such goods will be bought and vice versa.
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