Demand is one of the main indicators of market relations. All manufacturers and sellers of products and services are engaged in its study. But this indicator affects not only these areas of activity. Many factors of the economy of not only individual countries, but also the entire world community, depend on its fluctuations. Consider in more detail individual and market demand.
To begin with, we will analyze the concept of demand. This is the desire of consumers, as well as their ability to purchase a certain amount of products or services. Their cost should match the capabilities of potential buyers. Also important is the time of sale, which should coincide with the desire to purchase these products.
Demand is divided into two categories:
1. Individual - this is the total quantity of goods that one buyer wishes to purchase. In this case, the price should justify the expectation of the consumer and the goods must be delivered at a certain time. This is the position of one individual, which in the market is not the main indicator.
The presence of competition implies a greater number of buyers in the market for this product.
Demand is caused by people's needs for certain values. Man always strives to make his life better. Everyone has their own desires and opportunities. Various factors influence their formation. They determine the living conditions of the person himself , the people around him, and the whole society to which he belongs.
But from an economic point of view, the main factor is solvency. Individual and market demand is the desire and opportunity of the buyer to purchase this product. The magnitude of demand is the entire volume of products that a consumer can purchase at the stated price at the moment.
A product with a lower price is sold faster and in large volumes. But high demand leads to higher prices. The lack of excitement and interest of buyers in the product leads to lower costs. Such an inverse relationship between the volume of production and its price is the law of demand.
Individual and market demand is determined for each price of the goods. But if the first indicator is the desires and opportunities of one buyer, then the second has a more voluminous meaning.
2. Market demand - a certain amount of product that will acquire a certain number of customers at a given price and at the moment. That is, this is individual demand multiplied by the number of consumers whose capabilities and needs are satisfied by this product.
If we consider graphically the dependence of demand on the cost of goods, then the curve will have a stepwise form. Every consumer has a threshold of sensitivity. A gradual decline in prices will not cause a stir and a sharp increase in demand. But if the cost of goods becomes lower by a significant amount, this will cause increased interest of buyers.
But individual and market demand, in addition to cost, is influenced by other features. Among the main distinguish the following:
1. Income buyers, which determine its budget.
2. The cost of goods that can replace this product.
3. Preferences of customers, which may change due to certain events.
4. Number of consumers or market size.
5. Expectations of buyers.
Therefore, these factors can make the impact of value insignificant.
Consumer preferences can significantly affect demand. This is the influence of fashion, national traditions, social status and technological progress.
Demand depends on many factors. An individual indicator is considered in smaller economic formations. In the economic sphere, market demand is considered within enterprises, companies, and other large structures.