Background: One of the most important subjects in health economics and healthcare management is the theory of induced demand; that is, caring for or providing and selling unnecessary services to users of healthcare systems, which is accompanied by the exercising of power by the service providers. Methods: This study was performed on physicians, nurses, and laboratory and radiology technicians working in Medical Science universities. Random sampling was conducted from five areas: the center, north, west, east and south of Iran. Data were gathered by a questionnaire, with a Cronbach's alpha of >0.7, consisting of nine dimensions on existence of induced demand and its associated factors. Results: The results showed that overall, 65.2% of the participants agreed with the existence of induced demand. Chi-squared test showed there was no difference in the level of induced demand between the regions of the country, education level and occupation. However, there was a significant difference in terms of gender (P<0.005). The Kruskal-Wallis test indicated a significant relationship between the associated factors and induced demand (P<0.005). Conclusions: Results showed that induced demand was influenced by factors including service recipients’ awareness, personal benefits of service providers, the extent they cared about health, supervision of insurance companies, industrialization of the health sector, diversity and increased number of trained experts and the quality of methods of training the service providers. Therefore, policymakers and planners should consider raising awareness of health service recipients, supervising insurance companies, reforming teaching methods, social culture making and changing the beliefs of society.