Market demand for a commodity is affected by the following factors:
(i) Price of the commodity: When price of the commodity increases in the market, its quantity decreases and vice-versa.
(ii) Income of the consumer: Market demand for a commodity is directly related to income of the consumer. Increase in income of consumer causes increase in market demand for the commodity.
(iii) Prices of related goods: In case of substitute goods, demand for a commodity falls with fall in price of the substitute commodity. In case of complementary goods, market demand for the commodity rises with a fall in the price of complementary commodity.
(iv) Tastes and Preferences: If consumer's tastes and preferences change, quantity demanded of the commodity will also change.
(v) Income Distribution: If income distribution is even, market demand for the commodity will be more than otherwise.
(vi) Size of Population: Higher population implies greater market demand for goods and services and vice-versa.
