Explain briefly the three factors that affect demand of a commodity
The three factors that affect the demand of a commodity are:
1. Price: Price is a major factor that influences demand. As the price of a commodity increases, consumers are likely to demand less of it, and as the price decreases, consumers are likely to demand more. This relationship is known as the law of demand.
2. Income: Income levels play a significant role in determining the demand for a commodity. When consumers have higher incomes, they are more likely to demand more of a particular commodity. Conversely, when incomes are lower, the demand for the commodity is likely to be lower as well.
3. Consumer preferences: Consumer preferences and tastes also impact demand. If consumers perceive a commodity as more desirable or preferable over other alternatives, they are likely to demand more of it. Likewise, changes in consumer preferences can lead to shifts in demand patterns, as consumers may start favoring different products or services.