Demand and Quality

Quality is defined as the totality of features and characteristics of a product or service that bears its ability to satisfy stated or implied needs. Whereas demand refers to the quantity of a product or service is desired by buyers at various prices. The demand for health is unlike most other goods because individuals allocate resources in order to both consume and produce good health.

The focus in economics is always on relationship between the quality of a product or service and how much consumers are willing and able to buy it.  If any product is of good quality, then it would also be expensive. Normally a rise in price of the product is expected to affect its demand negatively and thus lead to a decline in demand, while a fall in price is expected to lead to a rise in the demand.  This negative relationship between price and amount of a product customers are willing to buy is called The Law of Demand. A study was done to predict the demand for quality in child care. The results show that the paid child care has been increased due to the lower prices. It was observed that due to lower prices, there was increase in hours of care demanded and the demand for quality related attributes was decreased.

 Taste and preferences of consumers also cause people to buy more or less products. For example, if a new health study comes out saying something bad for your health instead of good quality, the demand for that product will decrease. A recent report depicts that most of the patients choose health care providers on the basis of referral or relationships and reputation.

CONCLUSION:-

Thus, better quality actually decreases or increases demand, totally depends on consumers who are heterogenous in their taste for quality.