Demand Theory is an economic principle that explains how the quantity of a good or service consumers are willing to purchase changes in response to its price. According to this theory, as the price of a product decreases, the quantity demanded typically increases, and vice versa. This relationship is often illustrated through a demand curve, which shows the various quantities consumers are willing to buy at different price levels. Factors such as consumer preferences, income levels, and the prices of related goods also influence demand. For instance, if the price of a substitute good, like butter, rises, the demand for margarine may increase as consumers switch to the cheaper alternative. Understanding these dynamics helps businesses and policymakers make informed decisions.