2.1 : Demand

Economists define demand as a consumer's willingness and financial capacity to purchase a product at a specific price point. These factors jointly influence the demand for a product or service.

Imagine a college student who needs textbooks for their courses. Their demand for textbooks depends on different factors, such as:

Price Changes: Alterations in price directly impact demand. If textbook prices decrease, students may consider purchasing additional textbooks or supplementary materials.

Income Levels: Changes in a student's financial situation, such as obtaining a scholarship or securing a part-time job, can significantly impact their purchasing power and, as a result, influence their demand for textbooks.

Preferences and Trends: Shifting educational preferences or trends toward digital learning materials may influence the demand for traditional textbooks.

Pierce and Availability of Substitutes: The price and availability of alternative resources, such as online study guides or library resources, can impact the demand for textbooks.

Understanding the concept of demand is essential for businesses and policymakers to respond effectively to changing consumer behavior and market conditions.