How Much Do My Consumers Want? Understanding Consumers Need

As a producer and provider of any good or service, the first question you must always ask yourself is “How much do my consumers want?” Do they even want to buy what I am offering? If yes, how much of it would they want and at what price? These are a few questions that you will be able to answer with the help of what you learn in this segment.

So let’s dive into the video.

At the start of the video, you will hear Debopam establish a problem statement that he will answer at the end of the session, implementing the concepts that you will learn through the course of this session. 

In this video, you learnt that what your consumers are willing to buy is called demand. Demand for any good is the quantity of that good that consumers are willing to buy during a given period of time and at a given price. 

You also learnt about the law of demand, which states that all other factors remaining constant (ceteris paribus), with an increase in the price of a good, the quantity demanded decreases, and with a decrease in the price, the quantity demanded increases.

Lastly, you learnt how to plot a downward sloping demand curve, depicting an inverse relationship between the price of a good and its quantity demanded.

It is important to note that the demand curve has been shown as linear for the purpose of simplicity in learning. In reality, this is not a perfectly linear graph, however, the inverse relationship holds true in all cases.

Ever wondered how surge pricing impacts the demand for cabs? Check out this research paper, you can go to page number 27 of this pdf.

Next, you will learn about what determines consumer demand.