A comprehensive formulation which specifies the factor that influence the demand for product

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A comprehensive formulation which specifies the factor that influence the demand for product

The demand changes as a result of changes in price, other factors determining it being held constant. We shall explain below in detail how these other factors determine market demand for a commodity. These other factors determine the position or level of demand curve of a commodity.

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It may be noted that when there is a change in these non-price factors, the whole curve shifts rightward or leftward as the case may be. The following factors determine market demand for a commodity.

Tastes and Preferences of the Consumers: An important factor which determines the demand for a good is the tastes and preferences of the consumers for it. The changes in demand for various goods occur due to the changes in fashion and also due to the pressure of advertisements by the manufacturers and sellers of different products.

Income of the People: The demand for goods also depends upon the incomes of the people. The greater the incomes of the people, the greater will be their demand for goods. In drawing the demand schedule or the demand curve for a good we take income of the people as given and constant.

When as a result of the rise in the income of the people, the demand increases, the whole of the demand curve shifts upward and vice versa. The greater income means the greater purchasing power. Therefore, when incomes of the people increase, they can afford to buy more.

It is because of this reason that increase in income has a positive effect on the demand for a good. When the incomes of the people fall, they would demand less of a good and as a result the demand curve will shift downward.

A comprehensive formulation which specifies the factor that influence the demand for product

For instance, as a result of economic growth in India the incomes of the people have greatly increased owing to the large investment expenditure on the development schemes by the Government and the private sector.

As a result of this increase in incomes, the demand for good grains and other consumer goods has greatly increased. Likewise, when because of drought in a year the agriculture production greatly falls, the incomes of the farmers decline. As a result of the decline in incomes of the farmers, they will demand less of the cotton cloth and other manufactured products.

Changes in Prices of the Related Goods: The demand for a good is also affected by the prices of other goods, especially those which are related to it as substitutes or complements.

When we draw the demand schedule or the demand curve for a good we take the prices of the related goods as remaining constant. Therefore, when the prices of the related goods, substitutes or complements, change, the whole demand curve would change its position; it will shift upward or downward as the case may be.

When the price of a substitute for a good falls, the demand for that good will decline and when the price of the substitute rises, the demand for that good will increase.

For example, when price of tea and incomes of the people remain the same but the price of coffee falls, the consumers would demand less of tea than before. Tea and coffee are very close substitutes. Therefore, when coffee becomes cheaper, the consumers substitute coffee for tea and as a result the demand for tea declines.

The goods which are complementary with each other, the fall in the price of any of them would favorably affect the demand for the other. For instance, if price of milk falls, the demand for sugar would also be favorably affected.

ASE STUDY ANSWERS, ASSIGNMNET SOLUTIONS The seven factors which determine the demand for goods are as follows:
However, there often exist market interactions and thus market feedbacks.
Consumer marketing research is a form of applied sociology that concentrates on understanding the preferences, attitudes, and behaviors of consumers in a market-based economyand it aims to understand the effects and comparative success of marketing campaigns.

When people would take more milk, the demand for sugar will also increase.These feelings can influence customer retention and influence what the customer tells others about the product or brand. The marketer may take specific steps to reduce post-purchase dissonance.

Advertising that stresses the many positive attributes or confirms the popularity of the product can be helpful. Non-price factors have the potential to greatly influence the success of an item on the market at any given time. Because of this, it is wise for marketers to pay attention to non-price factors that affect demand as they prepare to put together a marketing and promotions plan.

The following are the factors which determine demand for goods: 1. Tastes and Preferences of the Consumers: An important factor which determines demand for a good is the tastes and preferences of the consumers for it.

plombier-nemours.com Function Demand function is a comprehensive formulation which specifies the factors that influence the demand for the product. Pz. Law of demand • It States that there is an inverse relationship between own price & quantity demanded.

Selection of a design and the resulting product portfolio influences strategic decisions at the SC level, due to the relationship between supply and demand location, process design, and .

As against this, if the organization is charging a much lower price in the same product group excluding quality, price becomes a differentiating factor. A clear business definition is helpful in identifying several strategic choices.

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