As is commonly known that microeconomicsPrices of goods and services are determined using the mechanism of supply and demand (supply and demand). When supply and demand curves intersect. That is the point at which the price and quantity of demanded goods meet in the market.

Simply put, the supply curve slopes to the upper right. and show that the more expensive the product Conversely, the demand curve is slanted to the lower right and indicates that a decrease in price will lead to an increase in demand.

But in fact, facts in the world can’t explain just one graph. From the supply side, there are x factors such as technology, capital and reputation of the product that can affect the price and production volume. In addition to the price factor There are other factors. There are many other things that may affect the demand of the product. what are these And how will it affect demand? Check out the full review below:

## Factors affecting the demand for goods and services.

There are 5 factors that affect the demand for goods and services:

### 1. The price of the goods and services themselves.

Simply put, if the prices of these goods and services go up. Your demand for these goods and services will decrease. And vice versa, for example, normally in a week you will drink 2 cups of coffee for IDR 20,000 per cup. However, when the price increases to IDR 30,000 per cup, you will only get 1 cup of coffee per week.

### 2. Prices of related products and services

The relationship between one item and another can be grouped into two groups:

#### Substitute

Two goods are said to be interchangeable if they are similar. used for the same purpose and sold in the same place So when the price of a commodity increases The buyer can switch to a replacement product. This means that the relationship between substitutes will increase. The price of product A increases the demand for product B..

An example is tea and coffee. The combination of these two drinks is used to quench thirst. Both contain caffeine and can be found in supermarkets. which means If the price of coffee goes up, theoretically, the demand for tea will go up. As coffee lovers switch to tea

in the context of capital markets Examples of Substitutes Between Stocks and Bonds both are securities Investors buy them for passive income. And both can be bought on the Indonesian Stock Exchange. In this case, it is widely understood that when the economy is good, They tend to buy stocks over bonds because they offer higher yields. As a result, bond prices fall and demand for stocks increases.

#### Supplement

Two goods can be called complementary goods when combined. As a result, As the demand for product A increases, so does the demand for product B..

A simple example is when gasoline is an automotive supplement. As the number of motor vehicles in Indonesia increases The demand for fuel oil (BBM) is also increasing.

in the context of capital markets Examples of complementary products include mutual funds and investment manager services. If the demand for mutual funds increases The demand for investment manager services of mutual fund issuers will also increase.

### 3. Income

Goods and services can be divided into three categories based on their reactions to changes in consumer income, namely:

#### regular product/regular product

Regular products are volume products. Demand will increase if consumer income increases.. Infrequently, regular items are also evaluated. essential goodsThis means that although demand increases if consumer income increases it might be possible Demand will not decrease if consumer incomes fall..

An example is rice. As your income increases, you may purchase more rice to prepare at home. When your income decreases You will still buy rice for your daily meals.

#### Inferior product/Inferior product

An inferior product is a product that Demand will decrease if consumer income increases and vice versa.. An example is instant noodles for boarding children. When the dormitory income is higher Whether it’s because of the money your parents sent you or the paycheck has already been paid out of time. The children in the dormitory will switch to food that is more expensive than instant noodles, such as egg rice or ramen, rice. Many boarding children bought instant noodles.

#### luxury goods / luxury goods

Luxury goods are goods whose demand increases as consumer income increases. And demand will decrease as consumer income decreases. in fact It is not uncommon for the increase in demand for luxury goods to exceed the increase in consumer income.

An example is a car. For example, you are promoted from employee to supervisor with a salary increase of 5,000,000 IDR per month. You have the courage to buy a car with credit of 7,000,000 rupiah per month. Considering that owning a car can be a separate prestige for you and your family at home.

### 4. Taste

Although this is not a predictable factor in value. But taste is also one of the factors that can affect the quantity of a person’s demand for certain products. But you still buy coffee and don’t switch to tea. Because you really don’t like tea. and vice versa

another example Stocks offer higher returns compared to mutual funds. and economic conditions are improving as well instead of buying stocks You still use mutual funds as an investment tool. because you feel safer

### 5. Hope (Expectation)

Like taste, expectations are invaluable. However, both have been proven to change a person’s desire for a product or service.

For example, hoping that the upward trend in stock prices will last for a long time, investor A buys stock B. With the expectation that the economy will be good in the next 1-2 years, Investor A shifts from Bonds are stocks because the latter yields higher, higher yields, resulting in increased demand for stocks and lower demand for bonds. In any context, changes in demand may not be obvious and have no effect. overall up in macroeconomicsLike it or not, the change will be more felt.