Demand · 1 min read

Definition of Demand

Demand is not just wanting something, it is about having the money and being ready to spend it on a product at a certain time.

This means if you want a bag of rice and you have the cash to buy it right now, that is demand.

It is a situation where desire or need is backed up by the ability and willingness to pay for specific quantities of a commodity at alternative prices within a period of time.

If you just look at a fine shoe in the market but you do not have money to pay for it, the shop owner will not call that demand.

Difference between Demand and Want

In Economics, wanting something is very different from demanding for it because demand requires you to have the money.

For example, a student might want a new car, but since they cannot pay for it yet, it is just a want and not demand.

Key points

•Demand is defined as the ability and willingness to buy a specific quantity of goods or services.
•For demand to exist, the purchase must be at a given price and at a particular period of time.
•Demand implies that a desire or need is supported by both the ability and willingness to pay.
•Demand is distinct from 'want' or 'need' because mere desire is not backed by the willingness or ability to pay.