Introduction:
If you're new to economics, you've probably come across the word "demand" many times. But what does it really mean? In this post, we’ll break down the concept of demand in very simple language so that even if you're in your first year of economics—or just curious—you’ll understand it clearly.
What Is Demand?
In economics, demand means the willingness and ability of people to buy a product or service at a certain price and time.
💡 In short:
“If you want something, and you also have money to buy it—that’s demand.”
For example, if you want to buy a burger and you have Rs. 300 in your pocket, you’re creating demand for that burger.
Key Features of Demand:
-
Desire Alone Isn’t Enough
Wanting a car isn’t demand unless you also have the money to buy it. -
Price Matters
Usually, when the price of something goes down, demand goes up (and vice versa). -
Time Factor
Demand always includes a specific time. For example, demand for umbrellas is high during the rainy season.
Types of Demand:
-
Individual Demand – Demand from a single person or buyer
-
Market Demand – Total demand from all buyers in the market
-
Effective Demand – Demand supported by the ability to pay
-
Latent (Hidden) Demand – When people want something but can’t afford it
Law of Demand (Simple Definition):
When the price of a good increases, the quantity demanded decreases—and when the price decreases, the quantity demanded increases.
(All other things remain the same.)
📉 This is why discounts increase sales!
Why Demand Is Important for Students to Understand:
-
It’s the foundation of microeconomics
-
Helps explain price changes in the real world
-
Useful for assignments, MCQs, and exams
Conclusion:
Demand is more than just wanting something—it's about the ability to buy it too. It changes with price, time, and need. Once you understand demand, you can better understand how the economy works in everyday life—from mobile phone prices to vegetable rates in the market.
📘 Bonus for Students:
Coming soon: Free PDF Notes on "Law of Demand" with Graphs + Examples
