Summary and Introduction to Demand
In microeconomics, demand refers to the buying behavior of a household. What does this mean? Basically, microeconomists want to try to explain three things:
- Why people buy what they buy
- How much they're willing to pay
- How much they want to buy
In this unit on demand, we will learn how to work with graphical and mathematical models for demand, we will observe how changes in price or income can affect demand, we will see how consumers make choices under uncertainty, and we will apply that knowledge to calculate the optimal purchases an individual consumer can make, given their income and the prices of goods.