3.1 Demand

What determines the demand for any given product? How will Canadian
consumers respond to the next sudden change in the price of gasoline or
coffee? What is the impact on the demand for kale once consumers decide
it is the latest superfood? We start by developing a theory to explain the
demand for some typical product.

Quantity Demanded

The total amount of any particular good or service that consumers want
to purchase during some time period is called the quantity demanded
of that product. It is important to notice two things about this concept.

First, quantity demanded is a desired quantity. It is the amount that
consumers want to purchase when faced with a particular price of the
product, other products’ prices, their incomes, their tastes, and everything
else that might matter. It may be different from the amount that
consumers actually succeed in purchasing. If sufficient quantities are not
available, the amount that consumers want to purchase may exceed the
amount they actually purchase. (For example, you may try to buy an
airline ticket for reading week only to find that all flights are already sold
out.) To distinguish these two concepts, the term quantity demanded is