Overview
Consumer demand is a fundamental concept in economics that describes how much of a product consumers are willing to buy at different prices. It is influenced by various factors, including consumer preferences, income levels, and the prices of related goods. Understanding consumer demand helps busine...
Key Terms
Example: The demand curve for coffee slopes downward, indicating that as prices decrease, demand increases.
Example: If the price of a product increases by 10% and demand decreases by 20%, the price elasticity is -2.
Example: At a price of $5, the number of pizzas consumers want to buy equals the number of pizzas suppliers want to sell.
Example: If too many cars are produced, a surplus occurs, leading to price reductions.
Example: During a sale, if more people want shoes than are available, a shortage occurs.
Example: A used car seller may know about defects that the buyer does not.