PIP: This article presents an analysis of the relationship between population size and market demand in China. It is argued that a smaller elasticity of a product is related to a greater impact of the size of population on the consumption of such a product. Greater elasticity reduces the impact of population. The impact of population is also mediated by average salary and salary structure. Salary structure affects prices, and prices affect supply and demand, which affect consumption. In a market-oriented economic system, the impact of population size on market demand affects supply and demand and prices. Current market demand reflects the effect of supply and demand in previous periods. Current population size will affect future market demand through prices and supply elasticity. Population changes are slow, and consumption changes are slow. The slowness of the process of change means there is time to adjust production and distribution in order to achieve stability in market supply. Control of price increases and inflation will promote economic growth, social stability, and improvement in China's socialist market economic system. It is argued that the supply of bicycles is elastic. Despite increased investment, labor, and fixed assets, profits will not grow. However the entertainment industry, as well as education, public welfare, urban utilities, noncommercialized housing, and telephones are less elastic. A large consumer population and a smaller supply elasticity result in high costs of installation, which are made higher by the state monopoly. It is argued that in China it is necessary to regulate certain necessities with less market elasticity in order to be consistent with optimum allocation of resources.