Basis For Demand

demand

Total quantity customers are willing and able to purchase

Demand is the quantity of a good or service that customers are willing and able to purchase during a specified period under a given set of economic conditions. The time frame might be an hour, a day, a month, or a year. Conditions to be considered include the price of the good in question, prices and availability of related goods, expectations of price changes, consumer incomes, consumer tastes and preferences, advertising expenditures, and so on. The amount of the product that consumers are prepared to purchase, its demand, depends on all these factors.

For managerial decision making, a prime focus is on market demand. Market demand is the aggregate of individual, or personal, demand. Insight into market demand relations requires an understanding of the nature of individual demand. Individual demand is determined by the value associated with acquiring and using any good or service and the ability to acquire it. Both are necessary for effective individual demand. Desire without purchasing power may lead to want, but not to demand.

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