Demand

Theory of Demand= The quantity consumers are willing and able to buy at a guven price in a given period of time

Demand goes up then quantity goes down

Demand goes down then quantity goes up

Things that affect Demand

Mnemonic= PASIFIC

Factors that Affect Demand (Simplified)To remember the various factors that influence demand, use the mnemonic PASIFIC:

• P: Population - More people can mean higher demand for goods and services.

• A: Advertising - Good advertising can make products more appealing and increase demand.

• S: Substitutes - If the price of similar products drops, demand for the original may fall.

• I: Income - As people earn more, demand for regular goods goes up, while demand for lower-quality goods may go down.

• F: Fashion - Popular trends can boost demand for certain products.

• I: Interest - Higher interest rates can reduce spending on large purchases that need financing.

• C: Complementary goods - If demand for one product goes up, demand for related products often increases as well.