Joan’s demand for, let’s say, books, is such as shown in the adjacent graph. We can start by analysing demand from a purely microeconomic point of view: a single individual, let’s say her name is Joan. The reason why this happens is known as the law of demand: ceteris paribus, and considering ordinary goods, the higher the price the lower the quantity demanded, and vice versa. This curve shows an inverse relationship between price and quantity demanded giving it a downward slope. The demand curve shows the quantity of a specific product that individuals or society are willing to buy according to its price and their income. We will first explain them separately and then jointly to show their interaction.ĭemand is the global market value that expresses the purchasing intentions of consumers. The concept of market is usually defined as a number of buyers and sellers of a given good or service that are willing to negotiate in order to exchange those goods. Demand and supply are possibly the two most fundamental concepts used in economics.
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