Which of the following demands has/have a direct relation?a)Price dema...
Income demand
Income demand refers to the relationship between the quantity demanded of a good and changes in consumer income. It measures how sensitive the demand for a product is to changes in income. When consumer income increases, the demand for normal goods typically also increases. On the other hand, the demand for inferior goods may decrease as consumer income rises.
Price demand
Price demand refers to the relationship between the quantity demanded of a good and changes in its price. It measures how sensitive the demand for a product is to changes in price. Generally, as the price of a product decreases, the quantity demanded increases, and vice versa. This is known as the law of demand.
Cross demand
Cross demand refers to the relationship between the quantity demanded of one good and changes in the price of another good. It measures the degree to which the demand for one good is affected by changes in the price of another good. If two goods are substitutes, an increase in the price of one good will lead to an increase in the demand for the other good. On the other hand, if two goods are complements, an increase in the price of one good will lead to a decrease in the demand for the other good.
Relation between the demands
Income demand, price demand, and cross demand are all different types of demand relationships. While price demand and cross demand are related to changes in price, income demand is related to changes in consumer income.
Direct relation
Among the given options, income demand is the only demand that has a direct relation to the other two demands. Both price demand and cross demand are influenced by changes in consumer income. When income increases, consumers may be willing to pay higher prices for certain goods or may have more disposable income to spend on substitute goods. Therefore, income demand has a direct relation to both price demand and cross demand.
Conclusion
In conclusion, the correct answer is option 'B' - Income demand. It is the only demand that has a direct relation to both price demand and cross demand. Price demand and cross demand are related to changes in price, while income demand is related to changes in consumer income.