Demand in economics

Consumer expectations about future prices, income and availability: If a consumer believes that the price of the good will be higher in the future, he/she is more likely to purchase the good now. If the consumer expects that his/her income will be higher in the future, the consumer may buy the good now. Availability (supply side) as well as predicted or expected availability also affects both price and demand.
Population: If the population grows this means that demand will also increase.
This list is not exhaustive. All facts and circumstances that a buyer finds relevant to his willingness or ability to buy goods can affect demand. For example, a person caught in an unexpected storm is more likely to buy an umbrella than if the weather were bright and sunny.
The number of consumers in a market: The market demand for a good is obtained by adding individual demands of the present, as well as prospective consumers of a good at various possible prices. The larger the consumer-base is for a good, the greater the market demand for it.

Demand function equation and curve[edit]

The demand equation is the mathematical expression of the relationship between the quantity of a good demanded and those factors that affect the willingness and ability of a consumer to buy the good. For example, Q_d = f(P; P_rg, Y) is a demand equation where Q_d is the quantity of a good demanded, P is the price of the good, P_rg is the price of a related good, and Y is income; the function on the right side of the equation is called the demand function. The semi-colon in the list of arguments in the demand function means that the variables to the right are being held constant as one plots the demand curve in (quantity, price) space. A simple example of a demand equation is Q_d = 325 - P - 30P_rg + 1.4Y. Here 325 is the repository of all relevant non-specified factors that affect demand for the product. P is the price of the good. The coefficient is negative in accordance with the law of demand. The related good may be either a complement or a substitute. If it is a complement, the coefficient of its price would be negative as in this example. If it is a substitute, the coefficient of its price would be positive. Income (Y), has a positive coefficient, indicating that the good is a normal good. If the coefficient were negative, the good would be an inferior good meaning that the demand for the good would fall as the consumer's income has increased. Specifying values for the non-price determinants, P_rg = 4.00 and Y = 50, results in demand equation Q = 325 - P - 30(4) +1.4(50) or Q = 275 - P. If income were to increase to 55, the new demand equation would be Q = 282 - P. Graphically, this change in a non-price determinant of demand would be reflected in an outward shift of the demand function caused by a change in the x-intercept.

Perfectly inelastic demand[edit]

Perfectly inelastic demand is represented by a vertical demand curve. Under perfect price inelasticity of demand, the price has no effect on the quantity demanded. The demand for the good remains the same regardless of how low or high the price. Goods with (nearly) perfectly inelastic demand are typically goods with no substitutes. For instance, insulin is nearly perfectly inelastic. Diabetics need insulin to survive so a change in price would not effect the quantity demanded. Insulin is not perfectly inelastic, however, as a prohibitively high price would cause some individuals to be incapable of purchasing insulin entirely. On the other hand, if insulin was sold at a very low price, it is possible that some individuals would purchase more insulin if they were not able to afford it before. Because of the effects of extreme pricing, no good can be considered truly perfectly inelastic.