Discuss the basic determinants for an individual’s demand for a specific good or service
Please provide the best answer for the statement.
The three determinants of individual demand are (1) preferences, (2) money income, and (3) the relative prices. Individual preferences influence how much of the product the individual is willing to purchase. Individual demand represents the amount of the product the person is willing and able to purchase. Money income limits the amount an individual is able to purchase, constraining the demand for a given product. Relative prices are also important in determining individual demand. If a given product becomes relatively more expensive, individual demand may fall due to the product consuming a greater percentage of the individual’s money income.
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