(a) “Demand for a commodity is the quantity which a consumer is willing to buy at a particular price at a particular time.” Two factors which determine demand are as follows: 

1. Price of the commodity: An increase in the price level reduces the purchasing power of consumers and the demand will be less. A fall in the price level increases the purchasing power of the consumers and the demand will be more. 

2. Population: An increase in population of a region will result in an increased demand of various goods. Also the composition of population determines the demand of certain goods proportionately. For example, an increased number of females in the region will generate more demand for sarees, ornaments etc. 

3. Pattern of income: With a rise in income, the purchasing power of people also increases which in turn encourages the people to demand more of luxuries and comforts. 

(b) Four characteristics of labour as a factor of production: 

1. Labour is an active factor of production. Without labour, other factors of production such as land and capital cannot produce anything. Labour is a living organism which requires sympathetic treatment. 

2. Labour cannot be separated form the labourer, because the labourer will have to be present at a workplace where work is going on. The worker and the service rendered by a worker go together. She/he cannot sell labour like land and capital. 

3. Labour is Perishable which cannot be stored. If a worker does not work on a particular day, her/his labour is wasted. The labourer has to sell his labour immediately, irrespective of the prices paid in terms of wages. Hence, labour has a weak bargaining power. 

4. All labourers are not equally efficient. Labour can improve its efficiency by investing capital on worker’s education and training and providing proper working environment and incentives.