Thursday, February 26, 2015
by Antonio C. Antonio
February 12, 2015
Demand is a market force that affects the price of a specific good or service. Demand is defined as an economic principle that describes a customer’s desire and willingness to pay a price for a specific good or service. Holding all other factors constant, the price of a good or service increases as its demand increases and vice versa.
Before proceeding further in discussing the dynamics of economic factors and principles such as demand, let us first establish the importance of demand to the environment and natural resources management. Part of natural resource management is the conversion of natural resources to their economic benefits. Economic benefits for natural resources largely dependent on economic and market forces such as supply and demand. The uplands, where most natural resources are found, play a definitive role in providing the necessary supply to respond to consumer demand. Consumer demand, however, could be classified into two types; individual and market.
Demand are the various quantities of a product (goods or services) that consumers are willing to purchase per unit time at various prices. Absolute units could be used to measure quantities… therefore; pieces, units, kilograms, dozens, bundles, cups, meters, or other physical units measurement. “Per unit time” at various prices is also considered in measuring actual demand. Other considerations are the purchasing power of the market and the willingness of the market to purchase such goods and services.
Talking about demand, there is really a difference between individual from market demand. Individual demand is the personal preference of an individual to a specific product (good or service). On the other hand, market demand is the total preference of a specific market towards a specific product. On the supply side, the product supplied by an individual provider of a specific good or service is called individual supply. Market supply, on the other hand, is the aggregation of individual supplies produced and supplied by all suppliers in a given market.
The Law of Demand states that as the price of a product increases, the quantity demanded decreases. This law simply states that the normal response of consumers or the market has a lot to do with the increase or decrease in the prices for certain goods and services. Prices and supply play an influential role in consumer demand. Factors affecting demand are: (a) Price; (b) Prices of related, substitute or compliment goods; (c) Number of consumers; (d) Income of consumers; (e) Tastes and preferences of consumers; and, (f) Range of goods available to consumers.
Upland goods and services, like any other product in the market, are influenced by prices, supply and demand.
Just my little thoughts…
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