Definition of demand (demand meaning ) economic

Definition of demand 

When economists discuss demand, they are discussing effective demand. They define this as the willingness and ability to buy a product. 

Demand and price

Demand and price are inversely related. 

Example: if demand rise the price will falls if price rise demand will falls    

Price rise. A higher price will mean that fewer people will be able to afford the product.

Individual and market demand 

Individual demand is the amount of a product an individual would be willing and able to buy, at different prices.

Market demand is the total demand for a product at different prices. It is found by adding up each individual's demand at different prices.

Aggregation: the addition of individual components to arrive at a total amount.

A demand schedule 

A demand schedule lists the different quantities demanded of a product, at different prices over a particular time period. 

A demand curve

The information from a demand curve can be plotted on a diagram. Price is measured on the vartical axis and quality demanded on the horizontal axis 

The effect of a change in price on demand 

Extension in demand: a rise in the quantity demanded caused by a fall in the peice of the product itself.

Contraction in demand: a fall in the quantity demanded caused by a rise in the price of the product itself.

Condition of demand 

Change in demand: shits in the demand curve.

Increase in demand: a rise in demand at any given price, causing the demand curve to shift to the right.

Decrease in demand: a fall in demand at any given price, causing the demand curve to shift to the left. 

Cause of change in demand 

Among the factors that can cause consumers to demand different quantities of a product, even in the price has not change, are change in income, change in price of related products, advertising company, change in population, and change in taste and fashion.

Change in income .

An increase in income raises consumers' purchasing power. For most of product, rhis result in an increase in demand. In fact, so common is this positive relationships between income and demand that such products are referred to as normal goods.

Inferior goods: a product whose demand decreases when income increase and increase when income falls.

Change in the price of related products 

An increase in demand can be caused by a rise in the price of a substitute product. If the price of holidays to Morocco rises, demand for holiday to Mauritius may increase. Demand will increase if the price of a complement falls. 

Advertising campaigns

A successful advertising campaign will increase demand for a product. It may bring the product to notice of some new consumers and may encourage some existing consumers to purchase more quantitie of a product.

Changes in population 

The population if a country can change in terms of both size and age composition. If there is an increase in the number of people in tne country, demand for most products will increase if there is an ageing population, with people living longer, and a fall in the birth rate, demand for wheelchair is likely to increase while demand for toys is likely to decrease.