Briefly explain the factors that affect the demand for a product.

      

Briefly explain the factors that affect the demand for a product.

Answers


Janet
Wealth:

-The demand for products depends to a large extent on the amount of money people in a country are able to spend. Poor people only have enough money to buy basic foodstuffs and other essentials. Rich people want to buy luxury items as well, and they are able and willing to pay money for them. A wealthy country generally offers more possibilities for farmers/agribusinesses to earn money than a poor country does.

Location:

- Demand for a particular product can vary greatly from place to place. In cities, for example, there is a high demand for basic food crops. In rural areas, many people grow these crops themselves. Therefore, a producer of a vegetable crop will probably be able to sell more at a marketplace in the city than in his/hers own village.
The demand for some products may extend beyond the farmer/agribusiness’ own country. For these products there is an export market. Exporters buy the products from the farmers and sell them to middlemen in foreign

countries. For some farmers it can be more attractive to focus on the export market. This can be difficult, however, because quality demands for export products are very high. Moreover, although the prices of products in the export market can rise much higher than in the domestic market, they can also fall very low. Farmers/agribusiness who focus solely on the export market are thus taking a greater risk.
Timing:

-Some products are seasonal. A traditional holiday season can be associated with a high demand for a particular product, such as a traditional drink or food item. A farmer/agribusiness can take advantage of this by putting a product on the market only when there is a high demand for it.

-Tastes & preferences:

People’s tastes and preferences differ. What one person likes, another may dislike; and what one person finds attractive may seem ugly to another. Tastes can also changer over time. A product can be in high demand one year, but be replaced by another product the following year. It is difficult for a farmer/agribusiness to anticipate future demand. But it is still worthwhile trying to do so, because a farmer/agribusiness who can take advantage of the public’s changing interests can earn a lot of money.

Price:

- Demand for a product depends ultimately on its price. A product that is very expensive will be bought only by a limited number of people, and vice versa.
janetraph answered the question on March 14, 2019 at 06:00


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