Factors affecting the quantity of items that consumers purchase, also called consumer demand, include cost, income level of consumers, personal tastes, consumer trust in future prices and the number of consumers purchasing certain items. Consumer demand for products is part of an economic concept called supply and demand. In an ideal economy, the marketplace finds equilibrium when product supply meets consumer demand and satisfies the needs of consumers and suppliers.Continue Reading
As with other economic principles, a set of laws governs the relationship between supply and demand. The first rule is that a shortage of goods occurs when either demand exceeds production rate, or when production rate increases while demand stays the same. This presents problems for consumers by escalating prices, which makes them less likely to purchase those goods. Contrarily, a surplus occurs when production rises when demand falls, or when production increases but demand plateaus. Prices fall, which benefits consumers but hurts companies supplying those products.
On graphs, the demand curve generally slopes downward. This indicates that consumer purchase of goods rises as prices fall. The curve of the slope changes depending on market conditions. Some consumer factors, like change in income, taste and style influence their desire to purchase certain products, as does price and availability. Ideally, markets find equilibrium where suppliers produce the right quantity of items, at the right price, to meet a steady demand.Learn more about Economics