Demand refers to the quantity of a good or service that consumers are willing and able to purchase at various prices during a given period. It represents the desire, willingness, and ability to pay for a product. Demand is influenced by factors such as price, consumer preferences, income, prices of related goods, and expectations. The law of demand states that as the price of a product increases, the quantity demanded decreases, ceteris paribus (all other factors being equal). Understanding demand is essential for businesses to assess market potential, set prices, and make production and marketing decisions.
What is demand in economics?
In economics, demand refers to the quantity of a good or service that consumers are willing and able to purchase at various prices, assuming all other factors remain constant. It represents the relationship between price and quantity demanded.
How is demand different from quantity demanded?
Demand refers to the entire relationship between the price of a good and the quantity that consumers are willing and able to buy at that price. Quantity demanded, on the other hand, refers to a specific quantity that consumers are willing to buy at a given price, holding other factors constant. Demand represents a range of possible quantities demanded at different price levels.
How does demand respond to changes in price and income?
Demand generally decreases with price increases and income decreases.