What is the Theory of Demand:
Theory of Demand is the economic relationship between the quantity demanded of goods and services that consumers are able to purchase at a given price level.

Consumers seek utility maximization which means satisfaction they derive from consuming goods and services for a given period and paying the price. Different income levels of consumers determine the different quantity of goods demanded to reflect their purchasing power and utilities.

For Example, Consumers from the low level of income may want Mercedes, but it does not add to quantity demanded as because they are not having enough purchasing power to buy it.

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