Demand is the quantity of products, services, assets and other types of value that the market is willing to buy at a particular price level and time. The following are illustrative examples of demand.
ProductsThe consumers of a nation are willing to purchase 1 million oranges a month at a price of $304 a ton. A hurricane results in damaged crops and reduced supply. Prices jump to $500 a ton and demand drops to 300,000 oranges a month.
ServicesAt a price of $10 a month, 100 million people globally will subscribe to a streaming media service. At prices above $10, demand falls quickly such that at $19 service only generates demand of 4 million subscriptions. A theme park experiences huge changes in demand based on the calendar and weather. The firm uses discounts, advertising and events to generate demand on days that are predicted to have low attendance.
LaborFirms in a region demand 40,000 information security professionals at an average salary of $120,000. A series of information security incidents cause demand to suddenly surge to 70,000 full time positions causing average salary to rise to $140,000 in a period of two years.
AssetsDemand for real estate in a region is 10,000 properties a month at an interest rate of 3%. Interest rates increase to 3.8% over a six month period and demand drops to 6,000 properties.
SecuritiesA speculative bubble in a particular type of technology stocks results in rapidly increasing demand and prices. The rising prices trigger a fear of missing out that causes more demand. The technology suddenly falls out of favor after a quarterly report that shows the industry is quickly burning through cash while growth is slowing. Demand instantly falls and investors demand a significant price drop before they will buy.
CurrencyFirms and individuals demand $2 billion Australian dollars priced in Japanese yen in a month due to travel, trade and investment flows.
This is the complete list of articles we have written about economics.
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