What is demand?
The the picture shows some people having
some people having coffee. Because it is their
demand
Economists use the term demand to refer to the amount of some good or service consumers are willing and able to purchase at each price. Demand is based on needs and wants—a consumer may be able to differentiate between a need and a want, but from an economist’s perspective, they are the same thing. Demand is also based on the ability to pay. If you can’t pay for it, you have no effective demand. What a buyer pays for a unit of the specific good or service is called the price.
The Quantity of Demand
The total number of units purchased at that price is called the quantity demanded. if a product of price increase, the quantity demand decrease. Conversely, a fall in price. will increase the quantity demanded. for example, people look for ways to reduce their consumption by combining several ways, commuting by carpool or mass transit, or taking weekend or vacation trips closer to home. Economists call this inverse relationship between price and quantity demanded the law of demand. The law of demand assumes that all other variables that affect demand are held constant.
A demand schedule is a list of the quantities demanded at
different prices. When constructing a demand schedule, everything else that
might affect demand is held constant. Consider the following market demand
schedule for coffee:
|
Price / $/cup |
|
|||
|
$5 |
4 |
|||
|
$4 |
8 |
|||
|
$3 |
12 |
|||
|
$2 |
16 |
|||
|
$1 |
20 |
There is an inverse relationship between price and quantity
demanded: when the price rises the quantity demanded falls. This "law of
demand" is due to consumers substituting purchases away from a good whose
price has risen towards relatively less expensive goods.
A change in the price of a good causes a movement along the demand
curve. If the price of coffee falls from $3 to $2, the market moves from point
A down the demand curve to point B. The quantity demanded rises from 12 to 16
cups of coffee. The change in the price of coffee has no effect on the demand
for coffee. Demand is represented by the entire demand curve. A fall in the
price of coffee does not cause any change in the demand curve.
You can also get more information to click given link :
1. https://en.wikipedia.org/wiki/Demand_curve
2. https://www.investopedia.com/terms/d/demand-curve.asp
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