Explain the four factors that affect demand. | Homework.Study.com (2024)

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Explain the four factors that affect demand.

Demand:

Demand is affected by various factors. It relates to how products and services are consumed. This is because, in a free economy, it regulates and works alongside supply on the market.

Answer and Explanation:1

Four factors that affect demand are price, buyers' income level, consumer taste, and competition.

  • Price: It is the most important factor that affects demand. This is because increases in this factor can cause demand to fall fast.
  • Buyer's income level: The higher this level, the more demand there is likely to be.
  • Consumer taste: This influences demand because people will always only buy things that they are drawn to.
  • Competition: This factor relates to how many companies are producing the same or similar products. It not only affects demand, but also price.

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Quantity Demanded Definition, Change & Examples

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Chapter 2/ Lesson 11

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Learn the quantity demanded definition and understand how to find quantity demanded. Study change in quantity demanded examples and understand their causes, as well as the relation of quantity demanded to price elasticity.

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