Yes, I agree with this statement.
Meaning of Demand : Demand refers to a desire or want for goods. Desire is the willingness to have some commodity which is backed by willingness and ability to pay.
Definition : According to Benham, “The demand for anything at a given price is the amount of it, which will be bought per unit of time at that price.
Features of Demand :
1. Demand is a relative concept.
2. Demand is essentially expressed with reference to time and price.
Determinants of Demand :
1. Price of Complementary Goods : Demand changes with changes in price of complementary goods like car and petrol, etc.
2. Advertisement : Effective advertisement and sales promotion will lead to greater demand of product. E.g. cosmetics, toothbrush, etc.
3. Price : Demand for a commodity is mainly influenced by its price. Normally at a higher price the demand is less and at a lower price it is more. Thus, demand varies inversely with price of a commodity.
4. Taste, Habits and Fashions : Habits influence market demand. If people habituated to the consumption of certain goods they will not give up such habits easily. E.g. demand for liquor, cigarettes, etc. Sometimes fashion change attitude and preference of people which in turn changes market demand.
5. Income: Income determines the purchasing power. Rise in income will lead to a rise in demand of a commodity and fall in income will lead to a fall in demand of a commodity.
6. Other Factors :
(a) Climatic condition,
(b) Changes in technology,
(c) Government policy,
(d) Customs and traditions, etc.
7. Nature of Product: Under necessary and unavailable circumstances the demand of a commodity will continue to be same irrespective of the corresponding price. E.g. medicine to control blood-pressure.
8. Level of Taxation : There would be increase in price of goods and services due to high rates of taxes which results in a decrease in demand and viceversa.
9. Expectation about the Future Prices : If the consumer expect a rise in price in the near future they will demand more at present price. Similarly, when they expect price to fall, then they will buy less at present prices.
10. Price of Substitute Goods : Demand for cheaper substitute goods will rise when there is fall in price of such goods. E.g. when sugar price rises, then the demand for jaggery will rise.
11. Size of Population: Demand for commodity depends upon size and composition of population like age structure, gender ratio which influence demand for certain goods. E.g. larger the child population, more will be the demand for toys, chocolates, etc.
