Question

Write any three factors affecting a commodity of demand.

Hint:

Price, income, and preferences are the key determinants of demand for any commodity.

Answer 1

Step 1: Price of the Good.
The price of a commodity is one of the major factors affecting its demand. Generally, if the price of a good increases, the demand decreases (law of demand), and if the price decreases, the demand increases.

Step 2: Consumer's Income.
A change in the consumer's income directly affects the demand for goods. With an increase in income, the demand for normal goods increases, while demand for inferior goods decreases.

Step 3: Consumer Preferences.
Changes in consumer preferences can increase or decrease demand. If consumers prefer a product more, the demand will rise, and if they prefer a substitute or complementary product, the demand for the original product will fall.