Understanding Demand

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Full transcript

Demand is simply how much of a product consumers want to buy at different prices. The law of demand says: when price goes up, quantity demanded goes down. We show this relationship on a demand curve — a line sloping downward from left to right. Think of pizza: at ten dollars, you buy three slices. At five dollars, you buy six. Other factors — like income or taste — can shift the entire demand curve left or right. Understanding demand helps businesses set prices and helps you make smarter buying decisions every day.

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