What prerequisite must people meet to establish demand or effective purchasing power?

The prerequisite for people to establish demand or effective purchasing power hinges on their readiness, willingness, and ability to purchase. This concept is fundamental in economics, as demand is not merely about wanting a product but includes the capacity to follow through with a transaction.

Being ready involves a consumer’s preparedness to make a purchase at a given time, while willing reflects their desire or preference for a product. The aspect of being able to purchase signifies that the consumer possesses the necessary financial resources to actually complete the transaction, ensuring that their demand translates into real market activity.

In contrast, while education about a product, previous purchasing experience, and access to financing can influence consumer behavior, they do not encompass the complete requirements for effective purchasing power. Without an undeniable readiness, willingness, and ability, potential demand remains theoretical rather than actionable. Thus, this concept plays a critical role in understanding market dynamics and consumer behavior.