Factors Affecting Demand And Demand
Economic Factors affecting the demand, Supply and Price of a commodity Introduction: Supply and demand are two important concepts in economics and supply and demand are considered to be the backbone of a nation’s economy. Demand is generally referred to as the quantity of product or services required by the consumers. The quantity of product or services referred to and the volume of product the consumers are ready to buy at a specific price. The demand relationship is generally referred to as the relationship between the price and quantity of products or services demanded nu the consumers. Supply generally represents the how much product or services a market can offer to the consumers. The product or services supplied refers to the amount …show more content…
Some of the economical factors affecting demand of a product are as follows: Price of the product: The prices of the product have a significant impact on the demand for a product. The price and demand have negative relationship; increase in price will significantly reduce the quantity of products demanded resulting in downward slope of demand curve of a product. If the price of a product is really high the consumer will shift their attention to other substitute products that are cheap and performs the same functions. Price of the substitute products: Price of the related goods or the substitute products have a significant impact on the demand of a product. Related goods generally refer to the complimentary products that can be used with the primary products and the substitute products that can be used in place of the primary products. If the price of the primary product increases the quantity of the product demanded will significantly fall. Disposable …show more content…
If the disposable income of a person is said to be high, then it can be said that the person is more likely to buy the product. Taste and preferences of the consumers: It is said that the desire of the consumer to own a product, is more likely that he is going to buy the product. It is also said that there is a very basic differences between demand and desire. Desire is explained as the willingness to buy a product based on the intrinsic qualities whereas demand is said to be the willingness and the ability to put ones desire into action which is buying the product. It said that both taste and preferences are said to be more or less constant. Expectations of the consumer’s about the future prices and level of income: Expectations of the consumers about the future price of the product also have a significant impact on the current demand of the product. If the consumer expects that the price of the product will go up in the future, then the consumer is more likely to buy the products immediately and if the consumer expects that the price of the product will fall in the future then the consumer is expected to postpone his purchase to the
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