Market demand and the factors affecting it

In each market there are two main subjects: the seller and the buyer. On them depends the size of demand and supply for any product (service). Market demand is the volume of products, goods that consumers will buy at a certain price in a specific unit of time. Proposal - the number of goods (services) that manufacturers are willing to provide at the same time at a given cost.

Many factors influence market demand. The most important of them is the cost. So, with a high price, the level of demand will be much lower than at a low price. The inverse relationship is observed in the sentence. That is, at a high cost, manufacturers are ready to provide more goods (services) to the market.

Market demand is formed not only under the influence of prices. Consider other factors affecting the purchasing power. This, first of all, the income of consumers. The more money people have at their disposal, the higher the level of demand.

Consumer purchases are influenced by purchases. If people believe that in the near future the prices for certain goods will rise, then the demand for these products can significantly increase. Consumers will simply make a reserve for the future. Accordingly, after a short period of time , sales will again decline.

Demand and supply in a market economy significantly depends on fashion. If clothes, shoes and accessories correspond to modern trends, then the youth tries to buy them. At the same time, fashionable goods can be quite expensive. But in 1-2 seasons these models will cost 3-5 times cheaper, while the need for them is practically not observed.

The market demand is also affected by advertising. If the seller does not spare money to distribute information about his product in the media, then the buyers even try to try a novelty for the sake of interest. If the goods they like, then the demand subsequently only grows.

The next factor is the quality of the product (service). Consumers, of course, will give preference to products of higher quality. Especially this indicator is important for wealthy people. They primarily value comfort and reliability in things.

An important non-price factor is traditions, customs in the family, a group of people, nationalities, the country. For example, on the eve of the holiday, which is celebrated only in a certain state, the demand for gifts will increase. In other countries, this situation will not be observed.

The level of income of the population also influences the demand . Increase of wages, issue of the thirteenth salary, bonuses, etc. Significantly increase customer demand. People are ready to spend more money for receiving benefits. Accordingly, the emergence of crisis situations causes a strong decline in sales.

The demand is divided into elastic and inelastic. The first kind concerns products that have several analogues. That is, if a product with elastic demand suddenly rises in price, and a similar product of another brand from a competitor will be sold a little cheaper, then the buyer will buy for a lower price. This refers to clothing, footwear, a number of food products. Inelastic demand has essential goods, for example, bread, milk, cereals, etc.

The situation of deferred demand is due to the fact that many products start hype in a certain time period, season. For example, on warm clothes and shoes people spend large sums in the beginning of autumn, spring, and also in winter. The demand for sugar rises during the ripening period of berries. And chicken eggs consumers take in large quantities before such a holiday as Easter.

We examined the concept of "market demand" and its factors. They found out that the actions of buyers are affected not only by the cost of goods and services, but also by a variety of non-price reasons.