Gujarat BoardEnglish MediumSTD 12 CommerceOCMMARKETING MANAGEMENT5 Marks
Question
Demand for the product and its price are directly related. Explain.
✓
Answer
Demand for the product:
Demand for the product and its price are directly related.
Factors that affect demand include taste and preference of the consumer, number of consumers, purchasing power of consumer, number of competitors in the market, price of competitor’s product, etc.
The producer may charge a high price if the demand is high, but if the demand is low, the price has to be kept low and competitive.
In case if the product of competitor is in high demand or if there are more competitors in the market, the producer launching new product might have to lower its price.
When the market is less competitive, the producer can keep a higher price and earn higher profit.
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