Answer to Question #276719 in Management for Azeem

Question

1. Why does demand for a product or service play a significant role in starting a new business? Give any two reasons.

Answer 1

1. Supply and demand have a significant connection because they work together to decide the prices and quantities of the vast majority of products and services offered in a particular market.

2. The supply and demand curve has an unavoidable impact on the price of the items and services that you provide. You cannot avoid it. Because of a lack of market demand, you will be compelled to cut prices in order to get things off the shelves, but a scarcity of supply will lead prices to spike.