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The Determinants of Demand

Written by: Doug Gorman

Article Overview: There are many factors that can contribute to the demand in the market and this demand will likewise also affect the supply. It is important to look into each of these factors to be able to cope up with changes. The business environment...

The Determinants of Demand

There are many factors that can contribute to the demand in the market and this demand will likewise also affect the supply. It is important to look into each of these factors to be able to cope up with changes. The business environment is always volatile because it is affected by the supply and demand of the marketplace. One of the most important determinants of demand is the income of the customer. When the income of the customer falls then his ability to purchase goods and service is affected.

Another determinant of demand is the shifting taste of the market. Sometimes, there are trends in the market the drives the demand of some products up while sometimes it would adversely affect the demand in the market. The taste of individuals themselves can reflect on the overall demand of the market. If some customers prefer chocolate more than coffee then you can expect the demand of chocolate to be a lot more significant compared to coffee.

Still another factor that influences the demand for a product is the prices of related goods. For example, if the price of an apple falls for one particular season then you can expect the customers to buy more apples during that time frame even if they are used to buying banana. In this regard, the banana industry suffers because the customers buy the apples because of the low price.

Your expectations in the future are also likely to affect the demand for a particular good or service right now. On the other hand, if you expect to encounter several financial difficulties in the near future then your demand for products and services then you are likely to save your money right now. For example, if you are expecting to earn a lot of money in the near future then you will most likely be more inclined to spend today.

Even the number of buyers in the market has will have an overall effect on the demand because they will drive up the production of these goods. The prices of these goods will also be dependent on the demand which is created by the number of buyers.
Every business in the world needs to follow the trends and where the demand in the market is going in order to survive. The enumerated determinants of demands are just some of the things that will affect the demand, there are still other factors that may affect the demand more than you thought possible.

As you can see, there are many determinants of demand and as a business owner; you should know each of these determinants individually and thoroughly. This is because you are in an industry that is highly dependent on the demands of the market.

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Article Tags: determinants of demand, determinants of demand, supply and demand, The business environment



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Re: No guru is an island - [quote="litekepr":33vnrk1w]Something said in the original post reminded me of the years that I worked closely with critique groups on my novels. I joined the group and we each gave input and critiques to one another regarding our writing. At first I took their comments as something that I HAD to do. However, there were plenty of times when their comments went against the things that I felt were best for the stories. In one instance, I had submitted a book to a publisher and she asked for some minor changes. I was still receiving comments from my critique group and so I went ahead and made all the changes they suggested. I finally finished all the revisions and resubmitted it to the publisher. Problem is - she read the first couple of chapters and call me to ask what happened to the story that she loved. The changes the group suggested had chanced the story and eliminated my unique "voice" in my story. I learned the definite lesson that day to weigh the comments and suggestions, but often you need to go with your gut instinct when it feels like the wrong thing for you. Shri[/quote:33vnrk1w] Litekepr, Many books had been trashed and bury by the so called guru. Many songs that could win great awards had not seen the light of the day because of the so called expert. This is the reason authors should not be give up on their dreams even when they are faced with lot of critisism. This is the reason I prefer to self- publish my books. With thousands of Print On Demand companies out there, you can print your book starting with 50 copies


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