Types of Demand

Types of Demand

1) Derived Demand:

This is a type of demand which occurs as a result of the demand for other commodities i.e. the demand of the product is not for its own sake, but for the manufacturing of another product which is in demand. The demand for one commodity will necessitate the demand for another commodity. For example, flour and sugar are demanded because there is a demand for bread, cake, biscuit, puff-puff, doughnut, etc. and wood is demanded for furniture-making.

2) Joint/Complementary Demand:

This is a type of demand which occurs when two or more commodities are required to satisfy a particular want. Goods are said to be in join/complementary demand when they produce more consumer satisfaction when consumed together than when consumed separately. If the demand for one of the commodities increases, the demand for the other(s) will also increase. Examples include bread and butter, car and petrol, camera and film, fountain pen and ink, cassette player and cassette, etc.

3) Competitive Demand:

This type of demand occurs with goods that are substitutes (i.e. goods that are alternative to one another in consumption). Goods are said to be in competitive demand when they all compete for the same consumer’s income. In other words, they serve the same purpose or perform a similar function such that an increase in the demand for one will result in a fall in the demand for the other. Examples are Peak milk and Loya milk, Omo and Klin, beef and chicken, Oral-B and Colgate, Milo and Bournvita, etc.

4) Composite Demand:

Demand is said to be composite when a commodity is demanded for alternative uses (i.e. required to serve two or more purposes). Examples are sugar, wood, cassava, millet, leather, etc.