Question

What are the important causes of increase in demand?

Answer 1

Important causes of increase in demand are the following:

1. When income of the consumer increases.
2. When price of substitute goods increases.
3. When price of complementary goods falls.
4. When taste of the consumer shifts in favour of the goods due to change in fashion or climate.
5. When price of the commodity is expected to increase in the near future.
6. Increase in number of consumers.
7. When the income of the consumer is expected to increase in the future.