Demand
BeginnerDemand is the quantity of a good or service that buyers are willing and able to purchase at different prices over a period of time.
Demand describes the buyer's side of a market. Generally, when the price of a product falls, people buy more of it, and when the price rises, they buy less. This relationship is called the law of demand.
For example, if a café cuts the price of a coffee from 4 to 3, it will usually sell more coffees, both because existing customers buy more often and because new customers are attracted.
Demand depends on more than price. Changes in income, the prices of related goods, tastes and fashions, expectations about the future and the number of potential buyers all affect it. If incomes rise, people tend to buy more of many products. If a substitute becomes cheaper, demand for the original product falls.
Economists distinguish between a change in the quantity demanded, caused by a change in the product's own price, and a change in demand, caused by other factors that shift the whole relationship. Together with supply, demand determines the market price.
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