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An effective demand has three characteristics namely, desire, willingness, and ability of an individual to pay for a product. The demand for a product is always defined in reference to three key factors, price, point of time, and market place.
Price demand. Income demand. Cross demand. Individual demand and Market demand. Joint demand. Composite demand. Direct and Derived demand.
If the amount bought changes a lot when the price does, then it's called elastic demand. An example of this is ice cream. You can easily get a different dessert if the price rises too high. If the quantity doesn't change much when the price does, that's called inelastic demand.
Demand theory is an economic principle relating to the relationship between consumer demand for goods and services and their prices in the market. Demand theory forms the basis for the demand curve, which relates consumer desire to the amount of goods available.