Chapter 4 Demand

Andrea couldn't wait to get the new CD on the shelves of the music store she managed. She sold more than 50 copies at $18.99 each on the first day. Six months later, Andrea moved the CDs to shelves in the middle of the store and cut the price to $14.99. Three years later, a new manager moved the four remaining CDs to the bargain bin. Customers could take one home for only $5.99.

Each of Andrea's decisions was shaped by the needs and wishes of her customers. Economists use the term demand to describe the ability and desire of consumers to buy a good. Paired with supply, demand forms one of the building blocks of the marketplace.

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