Market Demand
Definition
Market demand refers to the total quantity of a product or service that consumers are willing and able to purchase at various prices during a given period.
Analogy
Imagine you're selling lemonade at a stand. If it’s hot outside and there are lots of thirsty people passing by your stand who want lemonade, then market demand is high. But if it’s cold outside and no one wants lemonade, then market demand is low.
Related terms
Supply & Demand: These terms describe how availability (supply) and desire (demand) interact to determine price. In our lemonade stand example, if you're the only one selling lemonade (low supply) on a hot day (high demand), you can charge more.
Elasticity: This term refers to how sensitive demand is to changes in price. If a small increase in your lemonade price causes people to stop buying it, then demand is elastic.
Consumer Behavior: This term describes how consumers make purchasing decisions and what influences these decisions. For instance, if people buy your lemonade because they like supporting young entrepreneurs, that's an aspect of consumer behavior.
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