What is the demand for a product?
The price (P) of a product is determined by a balance between production price (S) and the desires of those with purchasing power at each price (D). The increase in price means an increase in movement along the curve. The diagram results in an increase in price and quantity sold of the product. However, there can also be a decline in demand which means that either the price has been set too high or the demand for the product is not enough. An equilibrium is the best way to achieve success it is defined to be the price-quantity pair where the quantity and demand is equal to the quantity supplied. This would mean that there would be a balance between supply and demand which means that there is a right number of products getting sold and the right amount is getting produced.
The demand of a product is influenced by many factors. An organization should be able to properly understand the relationship between the demand and its every determinant to analyze and estimate the individual and market demand for a product in which they may be producing. The demand for a product is influenced by various factors, such as price, consumer’s income, and growth of population.