and other factors (U). Each of these factors influences demand in a different manner. To isolate the effect of. these factors and to study the relationship between demand for a commodity and of the above variables, we make the assumption of ‘ceteris paribus, i.e., ‘other thing being equal. For example, if we want to study the relationship between price and demand for commodity N, we shall have to assume other factors, like, P_R, Y, T, and U to remain constant or unchanged.
(i) Price of the commodity. The first important factor that influences your decision to purchase a particular commodity is its price. Your mother refuses to cook cheese regularly for your food because she finds its price to be very high; instead, she cooks some other vegetables. if cheese were to be cheaper, it would have been more in demand. In other words, the lower price of a commodity attracts more consumers, higher price restricts their number.

(ii) Prices of the related commodities. Did you ever notice that an increase in the price of sugar leads to a rise in the price at which a cup of tea is available in your canteen? A rise in the price of edible oils leads to a rise in the price of snacks and it affects the demand for snacks. Similarly, a change in the price of the batter is will affect the demand for transistor-sets: a change in the price of refills will affect the demand for ball-pens; a change in the price of petrol will affect the demand for cars and scooters; a change in the price of CDs will affect the demand for VCD. These are all related commodities. Related commodities, as a matter of fact, can be classified in two parts, viz.,
(i) Complementary goods, and
(ii) Competitive goods or substitutes.

Complementary goods are those wherein one commodity possesses utility and is demanded only when the second related commodity is also available. For example, a ball-pen without its refill is useless. A piece of cloth, unless it is stitched, is. not of much use. A rise in the price of stitching will lead to a fall in the demand for cloth. A rise in the price of battery cells will lead to falling in the demand for transistors. A fall in the price of film rolls will result in increased demand for cameras; a fall in the rental of CDs will create more demand for VCDs and TVs. Similarly, a fall in the price of petrol will induce people to use more of their cars and scooters, etc. This sort of relationship. is known as ‘ inverse relationship’ represented by a downward sloping curve as shown in Fig. 1.

In Fig. 1 along X-axis is measured the quantity of Hot-Shot Cameras and along with the Y-axis price of Film Rolls. At the price OP, OQ quantity of Hot-shot Cameras is being demanded. If the price of film rolls falls to OP2, the quantity demanded of cameras increases to OQ2 and vice-versa.

Competitive goods or substitute goods. are those goods where one. can be consumed with equal case and satisfaction in place of another. for example, coffee can replace tea; likewise, cheese can be a substitute. For mutton, or motorcycle users can shift to scooters. Change in the price

of a commodity is bound to affect the demand for the related commodity. For example, if the price of coffee falls, Consumers may substitute coffee.  A fall in the price of milk-shake or fruit juice will lead to a fall in the demand for soft drinks. A rise in the price of scooters will create more demand for motorbikes. Likewise, a rise in the price of Hero-Hond motor-bike will result in an increased demand for a TVS-Suzuki bike.
This type of relationship is known as a direct relationship and is represented by the upward sloping demand curve. as shown in Fig, 2. In this figure, quantity. of TVS-Suzuki is measured along the X-axis, and the price of Hero Honda along the Y-axis, If the price of Hero-Honda falls to OP2 demand for TVs-Suzuki falls to OQ2 and likewise with rising in the price of Hero-Honda to OP1 demand for TVs-Suzuki rises to OQ1
The above type of relationship between demand for a commodity and the price of the related commodity is also known as Cross demand.
(iii) Income of the consumer. Ordinarily, with an increase in income of an individual or of a household, demand for goods increases. However, this may not always be true. We may distinguish between three types of commodities:
(a) necessaries,
(b) comforts and luxuries, and
(c) inferior goods. Necessaries are those goods that are essential for human existence like food, cloth, shelter, etc. These goods, therefore, occupy a place of priority in the consumer’s order of preference. Therefore, even at a low level of income, a large share of income is spent on such goods. With the rise in income, it is possible that the consumers may demand more of these goods. But, there is a limit to which, even a very rich man can eat food. In other words, with an increase in income, demand for necessary. goods may increase up to a point, but beyond that point, an increase in income does not affect demand for this type of goods. Comforts and luxuries are those goods which make our life more enjoyable; for example, a simple meal is a necessity for existence, a four-course meal is more enjoyable, a ten-course dinner is a good luxury. As income increases, demand for comforts and luxuries will also go up. Inferior
goods are those goods that are rated very low in the consumer’s estimation and for which better substitutes may be available; for example,

coarse cloth and coarse grains. A consumer may not like to consume these goods because he may not afford to purchase better substitutes. Therefore, when his income increases, a consumer will substitute inferior goods with better substitutes, i.e., with an increase in income, demand for inferior goods will fall, and vice-versa.
The relationship between income and the demand for different commodities can be illustrated with the help of Fig.3.
In Fig. 3 we have measured quantity along X-axis and income along Y-axis. Curve DN expresses the relationship between the level of income and the quantity demanded necessaries of life. Beyond the income level OR, where OQ quantity is being demanded, curve DN becomes a vertical straight line, which shows that further increases in the level of income do not affect the demand. Curve DC expresses the relationship between the level of income and the quantity demanded of comforts and luxuries. The DC curve moves upwards to the right indicating an increase in demand with an increase in the level of income. DF curve expresses the relationship between the level of income and the quantity demanded of inferior goods. If we start from a very low level of income, a consumer’s, demand for inferior goods may also increase. But this increase shall be only short-lived; Further, an increase in income beyond, say OR, will result in a decrease in the quantity demanded of these commodities. The above type of relationship between demand for a commodity and the level of income is also known as Income Demand.

(iv) Tastes and Preferences of the Consumers. All factors affecting the consumer, other than prices and income, are conveniently lumped together as tastes and preferences. Tastes and preferences change according to the nature of business, age, the family composition of an individual, etc. Demand for a commodity is directly related to the tastes and preferences of the consumers. For example, a teacher to justify his profession may demand more books and journals than an office-going clerk. Similarly, old persons make more demand for sticks and spectacles than the youth. Similarly, if high heel shoes come into fashion, demand for Such shoes increase, During the rainy season, demand for umbrellas, raincoats, and rubber shoes increase, whereas, during winters, demand for Woollen clothes rises.

The other important determinants of demand are as follows :
(v) Size of Population. Ordinarily, a large population will provide more demand for goods. There are more vegetable vendors, fruit-sellers