Market demand theory

Market demand theory describes how the quantity of a product or service that consumers are willing and able to buy varies with its price. Generally, as prices decrease, more people want to purchase the item, increasing demand. Conversely, higher prices tend to reduce demand. This relationship is represented by a demand curve on a graph, which typically slopes downward. Factors such as consumer preferences, income levels, and the prices of related goods also influence demand. Overall, market demand reflects the collective purchasing behavior of consumers based on price and other influencing factors.