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 Form 3 Business Studies: Demand and supply online lessons

Meaning of demand and factors that influence demand of a product

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Answer Text:
Demand and supply:
Meaning of demand and factors that influence demand of a product:
-Demand refers to the quantity of goods and services that buyers are willing and able to buy at a given price over a given period of time.
Factors: The price of the product:
-High price leads to low demand while low prices leads to high demand.
Price of other related products:
-Increase of price of one, leads to increase in demand of the other and vice versa.
Income of consumers:
-increase in consumer income leads to high demand and vice versa.
Population size:
-high population means high demand and vice versa.
Government policy:
-They include:taxes, subsidies and regulations.
-Unfavorable government policies reduce demand of certain goods and favorable one increase demand.
Expected future price changes:
-When prices are expected to increase in future , demand will be high at the present and vice versa.