Why there is no demand for goods

Demand is the amount of goods and services that customers are willing to purchase in the market at a given price. A drop in demand is quite common. There may be several reasons for this, the main of which are the decline in consumer incomes, lower product quality and higher prices.

Instruction manual

1

The most significant factor affecting consumer demand is customer income. For most goods and services, a decrease in the monetary income of the population leads to a decrease in demand for them. Such goods and services are called goods of the highest category, or normal goods. But there are exceptions when a decrease in citizens' income leads to an increase in demand for certain categories of goods, for example, used cars, second-hand clothes.

2

Higher product prices are another reason for the fall in demand. Moreover, the change in the prices of substitute and complementary goods is also important. If the price of a chargeable item has fallen, demand for the item in question may fall. For example, with a decrease in the price of pears, the number of apples purchased is noticeably reduced. Conversely, if the price of butter rises, the demand for margarine will increase markedly. Complementary goods include those that are consumed together, for example, gasoline and cars, trips to the sea and bathing accessories. With an increase in the cost of the main product (car), the demand for a complementary product - gasoline - falls.

3

A significant factor influencing the magnitude of demand is the tastes and preferences of consumers. Unfavorable changes in consumer preferences can lead to a decrease in demand for a product, caused, for example, by a decrease in product quality or the appearance on the market of a new product that is ahead of the previously existing product in terms of functionality. So, the appearance on the market of an MP3 player has led to a drop in demand for a CD player.

4

Obviously, a reduction in the number of buyers in the market leads to a decrease in demand. With a drop in the birth rate, for example, the demand for baby supplies (diapers and clothes), and the services of children's institutions is significantly reduced.

5

They can cause a drop in demand and consumer expectations. If consumers expect a decrease in the price of the product after some time, they will buy it in smaller quantities, thereby reducing demand at the moment.