Factors determining demand:
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The following are the factors that affect the demand of a good:


1.Change in fashion: When some goods go out of fashion, they will be less in demand even though they may become cheap

2.Change in weather: Demand change when the weather changes. A fall in the price of woolen clothes does not increase their demand in summer.

3.Change in the quantity of money in circulation: If the quantity of money in circulation increases, the people will have more purchasing power and consequently demand will increase and vice versa.

4.Change in population: A change in size or composition of population will bring about a change in demand. If birth rate increase, more toys and perambulators will be demanded, country with old men will demand more walking sticks, false teeth and medicines.

5.Change in wealth distribution: Suppose wealth is distributed more evenly then the demand for necessaries and comfort commonly used by poor people will increase, while demand for luxuries will fall.

6.Change in real income: Increase in real income means things is cheap and with the same money/income people are able to buy more goods.

7.Change in habit, test and customs: Demand also depends on the tastes, habits and custom of a commodity. For example, if people develop tastes for tea in place of lassi, the demand for tea will increase.

8.Technical progress: Inventions and discoveries bring new things in the market and therefore demand for old things decline. For example, radio sets replaced gramophones and TV sets are replacing radio sets.

9.Discovery of cheap substitutes: Manufacture of vegetable ghee has made available a cheap substitute for ghee and therefore demand for pure ghee has decreased

10.Advertisement: A clear and persistent advertisement may create a new type of demand.