Which of the following factors affects individual’s demand for a commodity ? 1. Price of the commodity 2. Income of the consumer 3. Prices of related goods Select the correct answer using the code given below :

An individual's demand for a commodity is determined by several key factors. First, the price of the commodity itself is a primary determinant; according to the law of demand, an increase in price typically leads to a reduction in the quantity demanded [2]. Second, the income of the consumer significantly affects demand; for normal goods, demand increases with income, while for inferior goods, it may decrease [4]. Third, the prices of related goods (substitutes and complements) play a crucial role [3]. For instance, an increase in the price of a substitute (like coffee) can increase the demand for the commodity in question (like tea) [1]. These factors are collectively represented in the demand function, which expresses demand as a function of price, income, and prices of related goods. Therefore, all three factors listed affect an individual's demand.

Sources

1. [2] Microeconomics (NCERT class XII 2025 ed.) > Chapter 2: Theory of Consumer Behaviour > EXAMPLE 2.2 > p. 28
2. [1] Microeconomics (NCERT class XII 2025 ed.) > Chapter 2: Theory of Consumer Behaviour > 2.6.3 Elasticity and Expenditure > p. 34
3. [4] Microeconomics (NCERT class XII 2025 ed.) > Chapter 2: Theory of Consumer Behaviour > 2.4.3 Normal and Inferior Goods > p. 24
4. [3] Microeconomics (NCERT class XII 2025 ed.) > Chapter 2: Theory of Consumer Behaviour > 2.6.2 Factors Determining Price Elasticity of Demand for a Good > p. 31