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Types of Demand

Some contrasting types of demand may be listed, because such listing helps us in analyzing consumer’s behavior.

1. Individual Vs Market demand

2. Market segment Vs Total market demand

3. Company Vs Industry demand

4. Domestic Vs National demand

5. Direct Vs Derived demand

6. Autonomous Vs Induced demand

7. New Vs Replacement demand

8. Short run Vs Long run demand

9. Household Vs Corporate Vs Government demand.

Just as the aggregate of individual’s demand from high income, middle income and low income group yields the market demand for a common item of consumption, in the same way, an aggregate of various company’s demand yields the industry’s demand, e.g., the demand for engineers. An aggregate of various market segments (North, South, East and West; or local, domestic and export) yields the total market demand for any item or industrial raw materials, e.g., ceiling fans, marine products, turnkey projected.

The demand for an item (of goods) in respond to its own price is called ‘direct demand’, whereas the demand for an item (of services from a factor) is called ‘derived demand’. The demand for labor in response to the wage rate is direct, but the demand for same labor in response to the price of electronic goods where labor enters as an input is derived demand.

There is a contrast between the user and between the uses. As such the household demand (say, for furniture) may be contrasted to the corporate demand (by a furnishing and decorator company) and government demand (by directorate general of Supplies and Disposables).

In the same way, the use of an item (say, refrigerator or coal) may be for domestic use or for chemist shop or a factory such that there is contrast between domestic demand and industrial demand.

Sometimes we draw a line of contrast between new demand and replacement demand, e.g., when machinery is purchased or installed new, compared to when it is repaired and replace by some parts of accessories. Similarly, we contras between original demand and additional or supplementary demand; or final demand and intermediate demand.