When the demand for a commodity depends not only on its own price but also on the prices of substitutes and complementary goods, what is this type of demand called?

Introduction / Context:
In economics and business management, it is important to understand how the demand for a product changes with different factors. One such factor is the price of related goods, such as substitutes and complements. This question tests the understanding of the specific term used when the demand for one commodity is influenced by the prices of related commodities rather than by its own price alone.

Given Data / Assumptions:

• Demand of a commodity is said to depend on prices of substitutes and complementary goods.
• Options given: Income-Demand, Price-demand, Cross-Demand, None.
• We assume standard microeconomic terminology.

Concept / Approach:
Key economic concepts:

• Price-demand usually refers to the relationship between demand for a good and its own price.
• Income-demand refers to how demand changes when consumer income changes.
• Cross-demand (also called cross elasticity of demand conceptually) describes how the demand for one good responds to the price changes of another related good, such as a substitute or complement.

Therefore, the correct approach is to match the description in the question with the correct term that emphasises the impact of other goods prices on the demand for the commodity in question.

Step-by-Step Solution:
Step 1: Read the phrase "depends upon prices of the substitutes and complementaries". This signals that other goods prices are involved. Step 2: Recall that Income-Demand is associated with changes in consumer income, not related goods prices. Step 3: Recall that Price-demand is about the commodity's own price and its demand, not the prices of other goods. Step 4: Recognise that Cross-Demand captures situations where the demand for one good varies due to price changes of another good, such as tea and coffee (substitutes) or car and petrol (complements). Step 5: Therefore, identify Cross-Demand as the correct answer.

Verification / Alternative check:
A verification method is to think of common textbook examples. If the price of coffee rises, some consumers may switch to tea, increasing tea demand. This is demand for tea responding to the price of a substitute, which is clearly cross-demand. Similarly, if the price of petrol rises sharply, demand for cars may fall because cars and petrol are complementary goods. Such cases are always explained under cross-demand or cross elasticity of demand in basic microeconomics.

Why Other Options Are Wrong:
Income-Demand: This relates to shifts in demand due to changes in consumer income levels, not due to prices of related goods. Price-demand: This refers to the relationship between quantity demanded and the commodity's own price according to the law of demand. None: This is incorrect because there is a defined term, Cross-Demand, that perfectly matches the description given in the question.

Common Pitfalls:
Students sometimes confuse price-demand and cross-demand because both involve prices, but the distinction is crucial. Price-demand is about the good's own price, while cross-demand is about other goods prices. Another mistake is to choose Income-Demand whenever they see the word "depends" without reading the remaining part of the sentence. Carefully noting that substitutes and complementaries are mentioned ensures that cross-demand is selected.

Final Answer:
When demand depends on prices of substitutes and complementary goods, it is called Cross-Demand.