Economics

What Is Demand In Economics With Examples

Demand is an important concept in Economics. In ordinary usage, demand means desire of individuals to buy a commodity. But in Economics fit has a special meaning. Mere desire for a commodity is not considered demand in economics. A commodity is said to be demanded when the individuals have desire or willingness to buy and ability to buy the commodities. Broadly speaking, the term demand implies three elements, namely:

  1. desire for the commodity,
  2. willingness to purchase the commodity and,
  3. ability to purchase the commodity.

Hence the desire backed by purchasing power of money is known as demand in Economics.

Demand always refers to a particular

  1. price,
  2. place,
  3. time.

Demand has no meaning when the price of a commodity, place of its purchase and time are not mentioned. The reason is that demand changes with a change in price, place and time.

If any of the above elements are absent, we cannot say it a Demand. For example, if a person has desire for the commodity, willingness to purchase the commodity but does not have the ability to purchase the commodity, we cannot say it a demand in economics. Hence demand has special meaning and usage in economics.

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