Determinants of Individual & Market Demand
Class 11 Micro Economics — What makes consumers buy more or less of a commodity?
Determinants of Individual Demand
Five key factors determine how much of a commodity an individual consumer will buy. Click each factor to explore its impact on demand.
Price of the Commodity
Determinant #1 of 5
Most Important Determinant
There is an inverse relationship — higher price → lower demand; lower price → higher demand. This is the fundamental building block of demand theory.
Determinants of Market Demand
Market demand — the total demand by all consumers in the market — is influenced by broader factors beyond individual preferences.
Change in Quantity Demanded vs Change in Demand
Critical Distinction — Do Not Confuse!
"Change in Quantity Demanded" ≠ "Change in Demand". They sound similar but mean completely different things in economics.
Change in Quantity Demanded
Caused by change in own price of the commodity. Movement along the same demand curve.
Mini Graph: Movement Along Same Curve
Change in Demand
Caused by change in other factors (income, tastes, related goods prices). Shift of the entire demand curve.
Mini Graph: Shift of Curve
Key Takeaways
- Individual demand depends on 5 factors: own price (most important), related goods prices, income, tastes, and future expectations.
- Market demand additionally depends on population, season/weather, and income distribution.
- Change in Quantity Demanded = movement along SAME curve (own-price change only).
- Change in Demand = shift to a NEW curve (other factors change).
- Expansion (downward movement) and Contraction (upward movement) are NOT the same as Increase (rightward shift) and Decrease (leftward shift).