Demand is an economic principle related to the need for consumers to buy products and services together with the willingness to pay a certain price. The demand characteristics they are linearly linked to supply, since companies invest to determine the quantity demanded by consumers.
While consumers try to pay the lowest price they can for products and services, suppliers try to increase their productivity. If suppliers charge very high prices, the amount of demand will fall and they will not be able to sell the amount of products necessary to achieve sufficient profits.
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In this article you will find:
Most important characteristics of the demand
There are a lot of characteristics of demand in economics determinants such as those indicated below:
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1. It is derived
For companies, the demand for a product derives depending on the consumer product that consumers use. This is due to the tools and equipment used to make the products and thereby achieve increased production.
The fact that market companies derive, as fundamental consequences for marketing, estimate the demand of a product that becomes familiar with the frequent use and execution of marketing activities that stimulate the sale of the product.
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2. The price
This refers to a basic situation, since the higher the price the lower the demand or if the price is lower the demand will be much higher. This means that the price of products and services will have a proportion depending on the demand.
If the price of a specific product or service falls, fewer consumers will be able to pay for it, which will lead to a decrease in demand.
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3. Payment capacity
Depending on the quantity of a product or service demanded, the capacity of the consumer to buy it will be given.
4. Is inelastic
The inelastic demand for a specific product is another of the characteristics of the demand for market companies, since its elasticity sensitizes the change in the prices of the products.
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Large quantities of industrial products in demand are relatively inelastic, this means that the demand for a certain product will depend very little on price differences. Typically, a portion of the resource price represents a portion of the total value of the finished product.
5. Access place
If the products and services are in a place with difficult access, the demand will be much lower. This is because the transport of products, charge a price that is included in the final product, but in case of Finding the products is more expensive than the final product, then the price will have to rise and as a consequence the demand go down to.
6. Fluctuation
Although the demand for industrial products does not change in the face of any price change, they can do so in response to other factors because demand for almost all types of industrial products fluctuates more than for industrial products. consumption.
The demand of large industries is attached to changes, since they are accentuated by variations in the demand for raw materials and tools. manufacturing, this can be seen more clearly when declines in demand within manufacturing industries affect suppliers to other materials.
One of the main causes of fluctuation is that some companies worry if they had to lacking resources in case demand increases and they run out of excess inventory by diminish. In this sense, they accumulate inventories if they observe growth in the economy or decrease them if they notice any change in shares.
7. Offer quantity
This characteristic refers to the demand for products that has a connection with the supply, which indicates who supplies the products and services to consumers, as well as the quantity offered.
8. Informed buyers
Mostly buyers or customers have the necessary information regarding what they get than final consumers, they understand much more knowledge in relation to the merits of different sources of supply and about the products that compete within the market due to the following reasons:
- Consumers generally have more brand options to choose from, unlike these types of buyers who have relatively fewer options to consider.
- The liability of these buyers is limited by the low number of products, unlike consumers who obtain much more from various options. Your job is to have full knowledge of a group of specific products.
- An error in most purchases is usually a negligible problem. On the contrary, in industrial purchases a mistake can become an excessive expenditure of money.
Because of this, suppliers of industrial products place much more importance on personal selling than companies that sell products of consumption, because they carefully select the product and make appropriate sales presentations to offer a production of quality.
The demand characteristics they are summarized in the understanding of a correct production and the quantity of products that the companies offer to buyers who are willing and able to purchase them at specified prices during a specified period of weather. If you want to see related topics, we invite you to visit our website.
Sources and references
- Potters C. (2021, January) Demand Definition.
- Brown A. (2019, September) Meanings and Definition of Demand.
