In microeconomics, the demand for a good or service is determined by which of the following?

• A. Consumers' willingness and ability to pay for the good at various prices, holding other factors constant
• B. The number of firms in the market, independent of price
• C. The total cost of producing the good, regardless of consumers' preferences
• D. The legal minimum price set by the government, even if no consumers want to buy at that price

Answer: (A)

Verified step by step guidance

1. Understand that demand in microeconomics refers to the relationship between the price of a good and the quantity consumers are willing and able to purchase, holding other factors constant (ceteris paribus).
2. Recognize that demand depends primarily on consumers' preferences, income, and prices of related goods, but most fundamentally on their willingness and ability to pay at different prices.
3. Note that the number of firms in the market affects supply, not demand, so it is not a direct determinant of demand.
4. Understand that the total cost of producing the good influences supply decisions, not demand, since demand is about consumer behavior.
5. Realize that legal minimum prices (price floors) can affect market outcomes but do not determine demand itself; demand is about consumers' willingness and ability to pay at various prices.