Meaning of Demand

The world's demand, desire and want are often used interchangeably to express what an individual needs and what he would like to acquire. However, in economics, the term demand has a specific meaning and content. It refers to the quantity of a commodity or service which an individual buyer or a household is willing to purchase at a given period of time. As such, demand is different from a mere desire. Human wants are unlimited and therefore, desires are many. But only that desire which is backed – up by the capacity to pay price for a commodity and the willingness to buy it, is termed as demand. In other words, the desire becomes effective only when the consumer has the means to buy a particular commodity at the given price. Hence, the demand is always with reference to a particular price as well as to a given time period, may be a day, a week or a month. It is obvious that consumer’s ability to pay and willingness to buy a commodity will be different at different price levels and over different time period. Therefore, in concrete terms, the demand for a commodity or a service, is the quantity that will be bought by the consumers at a given price and during a given period of time.