What is DemandWhat is Demand

Demand means the quantity of goods and services which consumers would buy in a market at given time and price.

What is Demand?

In common language, ‘demand‘ and ‘desire’ are used as synonymous. But in economics, demand implies more than mere desire. The demand for a commodity is its quantity which consumers are able and willing to purchase at various prices during a given period of time. A beggar’s desire to travel by aeroplane from Dang to Kathmandu has no significance, as he cannot pay for it. On the other hand, a businessman’s desire to go to Kathmandu by aeroplane is demand as he is able to pay for it and willing to do so. Thus, demand means desire backed by willingness to pay and ability to pay.

Therefore, both willingness and ability to pay are essential elements for demand. For instance, if a man is willing to pay but he is unable to pay, his desire will not become demand. In the same way, if he is able to pay but is not willing to pay, his desire will not be changed into demand. In order to change desire into demand, it is essential that he should have both willingness and ability to pay. Thus, a desire accompanied by ability and willingness to pay makes a real or effective demand.

According to Prof. Marshall, “Demand refers to the quantities of a commodity that the consumers are able and willing to buy at each possible price during a given period of time, other things being equal.

In the words of Bober, “By demand we mean the various quantities of a given commodity or service which consumers would buy in one market in a given period of time at various prices.”

It is clear from the above definitions that demand for a commodity is also associated with price, place and time. Thus, demand means the quantity of a commodity which consumers would buy in a market at given period of time at different prices.

Also Check : 8 Features of Market Economy

Demand Function

Demand function is defined as the functional relationship between demand for a commodity and its determinants. It is expressed as:

Dx= f(Px, Y, P., T, A, P, D, E)

Where,

Dx = Demand for commodity X

P= Price of X good

Y= Income of the consumer

Px=Price of related goods

Tr= Taste and preference of the consumers

A= Advertisement

P= Population

D= Distribution of income

E= Expectation of the consumer

Above given demand function is multivariable demand function. If we assume factors other than price do not change, we get single variable demand function, which is as follows:

Dx = f(Px)

Difference between Desire and Demand

In economic ,Demand implies more than mere desire.Desire is just a wish to have something whereas demand is the desire backed by willingness and ability to pay.The difference between desire and demand are as follows.

Basis Of DifferenceDesireDemand
1.NatureDesire is a wish to have something.Demand is a desire backed by ability and willingness to pay.
2.ResourceResources are not required
to have desire.
Resources are required to be demand.
3.Place and TimeDesire is boundless and a man can have unlimited number of desires.Demand is limited by price of the consumer,etc.
4.Place and TimeDesire may take Place anywhere at any time.Demand Takes Place Only at a Particular place and Time .
5.Examples If a beggar wants to buy a car ,it’s his desire.if a Millionaire wants to buy a car ,its may be demand.
Table of Difference between Desire and Demand

Also Check: Market Of Economy Meaning| Features,Benefits & Disadvantages.

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