The Demand-Resource Model

The Demand-Resource Model explains how the availability of resources influences economic demand. Essentially, it suggests that the more resources are available, the more products and services can be created, which, in turn, affects consumer demand. If resources are scarce, production decreases, often leading to higher prices and lower demand. Conversely, when resources are abundant, production increases, leading to lower prices and higher consumer demand. This model highlights the interconnectedness of resource availability and economic activity, emphasizing that resource management is crucial for maintaining a healthy economy.