Demand — Important Questions

Price of a commodity and quantity demanded by one buyer at different prices

Step 1: An individual demand schedule is a table prepared for a single buyer. Step 2: It shows how much quantity that one buyer is willing to purchase at various price levels. Step 3: For example, Varsha's demand schedule for mangoes showed that she buys 2 kg at Rs. 50, 2.5 kg at Rs. 40, and so on — these are all quantities demanded by one person (Varsha). Step 4: Option A is incorrect because a demand schedule focuses on price, not income changes. Step 5: Option C describes market demand (all buyers together), not individual demand. Option D relates to production, which is irrelevant here. Th

Substitute goods

Step 1: Related goods are of two types — substitute goods and complementary goods. Step 2: Substitute goods are those that can be used in place of each other to satisfy the same need. For example, if you want a hot drink, you can choose either tea or coffee. Step 3: Tea and coffee satisfy the same want and can replace each other, so they are substitute goods. Step 4: Complementary goods are used together (like car and petrol), not as alternatives. So that option is wrong. Step 5: Inferior goods and normal goods are based on income effects, not the relationship between two goods. Hence, the cor

Complementary goods

Step 1: Complementary goods are those that are used together to satisfy a particular want. You cannot use a car without petrol — both are needed together. Step 2: Car and petrol are used jointly; one is incomplete without the other. This is the definition of complementary goods. Step 3: If the price of petrol rises sharply, people may think twice before buying a car — so demand for car falls when price of petrol rises. This inverse relationship confirms they are complementary. Step 4: Substitute goods (like Coke and Pepsi) replace each other — car and petrol do not. Step 5: Inferior and normal

Normal goods

Step 1: Goods can be classified based on how their demand changes with a change in the buyer's income. Step 2: Normal goods are those for which demand increases when income increases. For example, when your income rises, you tend to buy more fruits, full cream milk, and butter. Step 3: Inferior goods are the opposite — when income increases, people switch to better quality goods and demand for inferior goods (like jowar, bajra, toned milk) falls. Step 4: Substitute goods and complementary goods are classified based on their relationship with other goods, not income. Step 5: Since the question