Types of Demand
Joint/Complementary demand
This refers to demand for commodities which are used together such that an increase in ,the demand for one of them. increases the demand for the other. Examples are cars and fuel, mobile phone and air time.
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There are perfect complementary goods and imperfect or poor complementary goods. For perfect complementary goods, the consumer practically cannot do without the other. An example is buses and diesel.
On the other hand, for imperfect complementary goods, a consumer can do without the other, so long as a substitute is obtained. If there should be an increase in the price of mobile phone; there will be a decrease in the demand for air time, other things being equal.
Derived demand
This is the demand for an item as a result of demand for another good, e.g. the demand for a factor of production is derived from the demands for commodities which such factors are used to make e.g. the demand for labour depends on the demand for what that type of labour can produce, Factors of production such as land, labor, and capital have derived demand. This is because an increase in the demand for a commodity will result in an increase in the demand for factors of production used in producing the goods.
Composite demand
Composite demand applies to commodities which have several uses. Wood for example is used for fumiture - tables, chairs, beds, windows, doors and others.
If there is an increase in demand for table this will result in higher prices being paid for wood. The high price for wood will increase the cost of production of chairs, bed, windows and doors and any other thing for which wood is used in manufacturing
Autonomous/independence demand
This is the demand for a commodity which does not affect nor is affected by the demand for other commodities, e.g. the demand for food in general.
Dependent demand
This is the demand for a commodity which causes the demand for others either to increase or decrease and is also influenced by the demand for other commodities.
Competitive Demand
Refers to demand for goods that serve the same purpose and therefore compete for the consumers' income. Examples of substitute goods are Milo and boum vita, butter and margarine and others.
A change in the price of one affects the demand for the other. If for instance there is an increase in the price of butter, demand for margarine will increase which will ultimately increase the price of margarine, provided the supply of margarine does not change.
On the other hand a decrease in the price of butter will lead to a decrease in the demand for margarine, and hence a fall in its price, given the supply.