ECO- Demand, page no 48

What is individual demand:

Individual demand refers to the quantity of a good or service that a single consumer is willing and able to purchase at various price levels during a given period. It is influenced by several factors, including the consumer's income, preferences, expectations about future prices, and the prices of related goods (substitutes and complements). As the price of a good changes, an individual's demand typically responds in accordance with the law of demand—meaning that, generally, as prices fall, demand increases, and as prices rise, demand decreases. Individual demand is graphically represented by a demand curve, which slopes downward, showing the inverse relationship between price and quantity demanded. Understanding individual demand is key in analyzing market behavior and consumer decision-making. For a example, As the price of a chocolate bar increases, the individual substitutes away from chocolate bars to other goods.

What is a market demand:

Market demand refers to the total quantity of a product or service that consumers are willing and able to purchase at various price levels within a specific time period. It reflects the overall desire for a product in the marketplace, influenced by factors such as consumer preferences, income levels, market trends, and the availability of substitutes or complementary goods. Market demand is typically represented by a demand curve, which shows the relationship between price and the quantity demanded, with lower prices generally leading to higher demand. Businesses analyze market demand to set pricing strategies, forecast sales, and plan production to meet consumer needs effectively. Understanding market demand is crucial for maintaining competitive advantage and ensuring the right balance between supply and demand in a given industry. For example, a cinema charges 10$ for its movie tickets purchase tickets at that price per week. The market demand for cinema tickets at 10$ per ticket is therefore 900 tickets per week.

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