Utility, or the state of being useful, falls under this category; many highly intelligent business students understand that market trends result directly from supply and demand, but other wonders why exactly there is demand in the first place.
Written by: Prof. Temmy
In today’s information-driven settings, it’s not difficult for students of business and economics to become experts, while not fully understanding more basic matters; and when they try to learn these basics, students are often embarrassed because they aren’t already familiar with them.
Utility, or the state of being useful, falls under this category; many highly intelligent business students understand that market trends result directly from supply and demand, but other wonders why exactly there is demand in the first place.
The explanation is straightforward: demand, or the desire of consumers to own a certain product or receive a certain service, exists because these goods and services provide customers with advantages or other fulfilment.
In short, demand exists because people naturally want to buy things that improve their quality of life! Demand has existed and will always exist; even if everyone gave up their hobbies, made their food, and lived simply, they would still “demand” sharp axes to cut wood, big stoves to cook with, strong materials to build with, and so on.
In conclusion, demand exists because of the universal human desire to be comfortable, well-off, and content. This is the utility of goods and services, and this is why the overall business cycle will never be completely reinvented; its origin is rooted in human interest.
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