Using Words

The most basic way to talk about the demand for a product is using words. For example, suppose that we want to talk about the demand for red wine that is produced in the United States. As we noted in the factors that change demand section, the demand for red wine will depend on all kinds of things: the price of a bottle of red wine produced here, the price of red wine produced in other countries, the income of wine-consumers, preferences for wine, etc. As we previously stated, most economists believe that (for most goods) the price of the product is the biggest factor in determining how much people are willing and able to buy. So, we could use words to describe this: if the price of a bottle of wine was $10 we would expect 50,000 cases of the wine to be sold in a month. However, if the price of a bottle of wine were $20 we would expect only 30,000 cases of wine to be sold.

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