Price factors affecting demand
Posted: Sun Dec 22, 2024 6:19 am
When choosing a product, buyers are guided primarily by its cost. Therefore, the main factor influencing demand is price.
The price of the product itself
The law of supply and demand usa phone list establishes an inverse relationship between the price of a product and the amount of demand. However, Giffen and Veblen goods do not obey it. That is, with a sharp jump in the price of fuel, bread or cereals, their sales will remain high, since buyers will refuse less important products. Similarly, when branded bags become more expensive, wealthy people will strive to buy them to emphasize their high position in society.
Price of interchangeable goods
Substitutes can be products offered on the same market and intended for specific purposes. An increase in the cost of a substitute leads to an increase in demand for the product, and vice versa. For example, when gasoline becomes more expensive, the need for alternative energy sources increases.
Prices of complementary products
Complementary goods are most often used together (camera film, printer cartridges, etc.). When their cost increases, demand for the main product falls. Thus, when gasoline prices rise, car sales decrease.
The price of the product itself
The law of supply and demand usa phone list establishes an inverse relationship between the price of a product and the amount of demand. However, Giffen and Veblen goods do not obey it. That is, with a sharp jump in the price of fuel, bread or cereals, their sales will remain high, since buyers will refuse less important products. Similarly, when branded bags become more expensive, wealthy people will strive to buy them to emphasize their high position in society.
Price of interchangeable goods
Substitutes can be products offered on the same market and intended for specific purposes. An increase in the cost of a substitute leads to an increase in demand for the product, and vice versa. For example, when gasoline becomes more expensive, the need for alternative energy sources increases.
Prices of complementary products
Complementary goods are most often used together (camera film, printer cartridges, etc.). When their cost increases, demand for the main product falls. Thus, when gasoline prices rise, car sales decrease.