Meaning of Demand



Meaning of demand

–          Desire backed up by ability and willingness to pay

–          Quantity of a commodity that a consumer want to purchase at a certain price during a certain time period

 

Mere desire is not sufficient for demand. The consumer must have ability to pay and willingness to pay for fulfillment of desire. For demand all of desire, ability and willingness to pay are required. In absence of one or more of them demand doesn’t arise. To express demand the following things must be specified

–          Quantity

–          Price

–          Time duration

–          Ability to pay

–          Desire

–          Willingness to pay

 

Example

–          If a beggar has the desire of a big apartment then that is not demand ( no ability to pay)

–          A man with salary of Rs 25000 a month, wants to buy vegetable of Rs. 35  for a week then that is called demand ( all price, time, ability, willingness and desire)

 

Differences between demand and desire

Serial no Demand Desire
1 It is the desire or want backed up by ability and willingness to pay. It is simply human want
2 It is limited It is unlimited
3 It is always for the things available in the market It may be for intangible and imaginary things too
4 It has a market value It may or may not have market value
5 Ability and willingness to pay is mandatory. Ability and willingness to pay are not mandatory.
6 It is expressed with reference to price and time duration It is not expressed with time and price duration.

 


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