Demand

Demand is an economic principle that describer’s a consumer’s inclination to consume a particular good or service at a particular price. In theory, a price of a good is determined by the intersection of the supply and demand curves by gauging the consumer market’s appetite to consume a good or service at a price offered by suppliers.

There are two types of demand: elastic and inelastic. A good or service with elastic demand experiences a sharp decrease in quantity demanded when the price of that good rises. A good or service with inelastic demand does not experience a sharp decrease in quantity demanded when the price of that good rises. Examples of elastic goods are toys or candy, while water and medicine are examples of inelastic goods.

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