The demand in economics is the amount of a product that consumers are willing and able to purchase at each specific price in a set of possible prices during some specified period of time (Jackson et al., 2004). In addition, it is a relationship between two economic variables which are the price of a particular good and the quantity of the good that consumers are willing to buy at that price (Taylor and Frost, 2002).
Demand also can be described by a table or a curve. For instance, the table 1 is the demand schedule of ice-cream which reveals the relationship between the price of ice-cream and the quantity demanded. This is an example of law of demand, which means that the higher the price, the lower the quantity demanded in the market, and the lower the price, the higher the quantity demanded in the market (Taylor and Frost, 2002). In other words, the price and the quantity demanded are negatively related.
Table 1 Example for demand schedule (Gans et al., 2011)
Figure 1.1 is a graph with the price of the good on the vertical axis and the quantity demanded of the good on the horizontal axis. The combinations of price and quantity demanded is called the demand curve. It also shows the negative relationship between price and quantity demand.
Figure 1.1 Example of demand curve (Gans et al., 2011)
The demand curve is drawn which is assuming all other things remain equal, except the price of the good . The change of any other factors will shift the demand curve (Taylor and Frost, 2002). The increase in the quantity demanded at any given price will shifts the demand to the right which is called an increase in demand. The decrease in the quantity demanded at every price will shift the demand curve to the left which is called a decrease in demand (Gans et al., 2011). This is illustrated in figure 1.2. Moreover, there are five significant factors that could shift the demand curve, which are including income of consumers,