What Are The Causes Of Rise And Fall In Demand?


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Uzma Shahzad answered
As it is known that extension and contraction in demand take place due to change in the price of a product; whereas rise and fall in demand take place due to factors other than price. These factors are as follows:
A change in income: when the income of a consumer increases he purchases more of superior goods and less of inferior goods at the same price. Therefore, demand for superior goods rises and that of inferior goods falls.

A change in Fashion: products in fashion are generally purchased more at the prevailing price. Similarly, their demand of the products out of fashion falls without any change in their prices. Thus, with a change in fashion demand of some products rises and that of other fall.
A change in weather: a change in weather also influences the demand. For example demand for tea rises in the winter season and falls during the summer season irrespective of a change in its price.

A change in population: when population of a country increases, the demand for all goods rises even though prices of the products may or may not change. A change in supply of money is another factor. With an increase in the supply of money in a country people get more purchasing power in their hands. Thus, their demand for goods and services rises. The opposite will happen in the case of a decrease in the supply of money.

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