Demand is the quantity of goods or services consumers will buy at a particular price, at a particular time period. Market demand refers to the sum of individual demand for a good or service. It is assumed that the demand being represented is effective demand- the ability of consumers not just to want, but be able to buy the product. Quantity demanded is the inverse function of price, however there are other factors which influence …
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showed last 75 words of 705 total
…alcohol and tobacco. Despite the higher cost of the product, the demand remains relatively similar, and thus governments earn more from their taxation policy. Both demand and elasticity work in conjunction to influence the decision making process of business and government. They are subject to change due to a number of external factors, yet help in maintaining equilibrium in the market. Graphs *demand curve *expansion and contraction in demand *shifts in the demand curve *elasticity