Demand is the quantity of a good or service that consumers are willing and able to buy at various prices. It is not just wanting something. You must also have the means to pay. A desire without money is not demand in the economic sense.

The law of demand says that as price rises, quantity demanded falls, all else equal. This is why sales work. When prices drop, more people buy. When prices rise, some buyers drop out. The relationship is usually shown as a downward-sloping curve on a graph.

Demand can shift. If incomes rise, demand for normal goods increases. If a substitute becomes cheaper, demand for the original falls. If preferences change, demand changes too. These shifts are different from movements along the curve. Confusing the two is a common mistake in introductory economics.

Factors that shift demand

• Income changes
• Prices of substitutes or complements
• Consumer preferences and trends
• Expectations about future prices
• Number of buyers in the market