Shows how consumer preferences determine consumer demand for goods and services, while business cost are the foundation for the supply of goods and services. A schedule , which shows the various amounts of a product consumers , are willing and able to purchase at each price in a series of possible prices during a specific period of time . Many factors other than the price of a product affect the amount purchased, i.e. Substitutes, Complements, Diminishing Marginal Utility, the Income Effect, Taste or Preferences, Numbers of Consumers, Money Incomes of Consumer, Consumer expectations.
Price is an obstacle , which deters consumers from buying.
People generally do not buy more of a product at a low price than they do at a higher price. Income Effect - In the short run, your income is fixed. If the price is reduced, you can afford more of the product without giving up other goods. A decline in the price of a product will increase the purchasing power of your 'money income' , enabling you to buy more of the product than before. A higher price has the opposite effect.