Please Share the below Post
Rate this post

The word ‘demand’ is so common and familiar with every one of us that it seems superfluous to define it. The need for precise definition arises simply because it is sometimes confused with other words such as desire, wish, want, etc.

Demand in economics means a desire to possess a good supported by willingness and ability to pay for it. If you have a desire to buy a certain commodity, say a car, but you do not have the adequate means to pay for it, it will simply be a wish, a desire or a want and not demand. Demand is an effective desire, i.e., a desire which is backed by willingness and ability to pay for a commodity in order to obtain it.

Definition:

In the words of Prof. Hibdon:

Demand means the various quantities of goods that would be purchased per time period at different prices in a given market”.

Characteristics or Features:

There are thus three main characteristics or features of demand in economics.

(i) Willingness and ability to pay. Demand is the amount of a commodity for which a consumer has the willingness and also the ability to buy.

(ii) Demand is always at a price. If we talk of demand without reference to price, it will be meaningless. The consumer must know both the price and the commodity. He will then be able to tell the quantity demanded by him.

(iii) Demand is always per unit of time. The time may be a day, a week, a month, or a year.

Explanation with Example:

For example, when the milk is selling at the rate of $15.0 per liter, the demand of a buyer for milk is 10 liters a day. If we do not mention the period of time, nobody can guess as to how much milk we consume? It is just possible we may be consuming 10 liters of milk per week, month or year.

Summing up, we can say that by demand is meant the amount of the commodity that buyers are able and willing to purchase at any given price over some given period of time. Demand is also defined as a schedule of how much a good that people will purchase at any price during a specified period of time.