The underlying foundation of demand, therefore, is a model of how consumers behave. The individual consumer has a set of preferences and values whose determination are outside the realm of economics. They are no doubt dependent upon culture, education, and individual tastes, among a plethora of other factors. The measure of these values in this model for a particular good is in terms of the real opportunity cost to the consumer who purchases and consumes the good. If an individual purchases a particular good, then the opportunity cost of that purchase is the forgone goods the consumer could have bought instead. According to Rebekah Richards, eHow Contributor, the following factors affect consumers in terms of brand preferences:
Advertising plays an important role in consumer preference, especially for non-durable goods such as food or magazines. Advertising informs consumers of available goods and services and also shapes their impressions of these products. Advertising can also create demand; for example, a consumer may not have wanted a new cell phone until he saw flashy new phones on TV.
Social institutions, including parents, friends, schools, religion and television shows also influence consumers' preferences. For example, kids might want to have the same toys their schoolmates have, while young adults may purchase the same products their parents used to buy.
Consumers usually choose to purchase more of a good if the price falls. For example, a sale or reduced prices may increase consumption of a good. On the other hand, an increase in price may cause reduced consumption, especially if the good has available substitutes.