Question- Why is it necessary for a country to have a clear demarcation of powers and responsibilities in the Constitution? What would happen in the absence of such a demarcation?What is law of demand and what are the various factors that affect the demand of the consumer goods?
Ans-The law of demand says that if the price of goods rise then demand of goods drop, and vice versa. The demand for a good increases or decreases depending on several factors.
Factors affecting the demand of the consumer goods:
#1 Price of the goods: In every economy there is a clear connection between the price of a good and the demand. Higher prices create lower demand and lower prices create higher demand.
#2 Advertisement: Advertisements create fake demand. They increase consumer awareness and expectations about the benefits of the product, and increase the number of people willing to buy the product for the right price.
#3 The price of related goods: Some goods are considered to be substitutes for one another, so if the price of ball pen will increase people may go for the gel pen, because pen has same function; however this totally depends on an individual choice.
#4 Tastes and Preferences: Individuals taste and preferences matter when he makes the demand for a product. For example, if a celebrity endorses a new product, this may increase the demand for a product. 2
#5 Income of the consumer: The income has direct impact on the demand. There is a positive (direct) relationship between a consumer’s income and the amount of the good that one is willing and able to buy. The law of demand gives simplistic view of demand and does not include any of the external factors that can impact demand. Demand of consumer goods can change even when prices are stable. And the law of demand only works if the other factors are remaining constant