Consumers create demand for which of the following in a market?

• A. Products supplied by monopolies
• B. Goods and services they are willing and able to purchase
• C. Government-provided public goods
• D. Only luxury goods

Answer: (B)

Verified step by step guidance

1. Understand the concept of demand in microeconomics: Demand refers to the quantity of goods and services that consumers are both willing and able to purchase at various prices.
2. Recognize that demand is created by consumers' preferences and purchasing power, not by the type of supplier (such as monopolies) or the nature of the goods (luxury or public goods).
3. Identify that consumers generate demand for goods and services they want and can afford, which includes a wide range of products, not limited to any specific category.
4. Note that government-provided public goods are typically supplied regardless of individual consumer demand because they are non-excludable and non-rivalrous, so demand in the traditional sense does not apply here.
5. Conclude that the correct understanding is that consumers create demand for goods and services they are willing and able to purchase, reflecting their preferences and budget constraints.