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The Demand for a firms product is influenced by a number of factors some of which may be influenced by the firm and others which may not Explain and discuss Where there is demand there is a supplier and sometimes suppliers can create demand There are many factors that influence demand for goods and services in the market place some are the result of natural demand born of basic necessity or perceived needs however firms can create desire for a product through the study and manipulation of the forces in demand and supply Every firm which provides goods or services to fee paying customers must by its very nature charge a price for that good or service to pay for its costs have retained profits for investments and to keep its shareholders happy The demand for a firms product is determined by various factors some of these factors are in the hand of the firm such as price advertising packaging brand name and quality One of the firms influences on the demand for a product is price the Law of Demand states that when the price of a good rises the level of demand for that good will fall as less people are now able to buy the good based on their income as more people switch to substitute goods which now may appear more attractive given their relative price and when the price falls demand for that good will rise as more people are now able to buy the good based on their income as more people switch from substitute goods now may appear less attractive given their relative price Ceteris paribus - other things being equal Every producer tries to out guess the market some with better research and results than others As they make predictions about sales They adjust their production therefore changing market supply The
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