Saturday, 2 May 2015

A note on the concept of Demand

Quantity demanded is a desired quantity. It is the quantity consumers wish to purchase not necessarily what they actually buy.(Quantity demanded or Demand is desire backed with purchasing power. To actually demand something you must want to buy that but also you must have ability to pay for it and intent to pay). If you want to buy a Sports Car, but actually only intend to buy and have ability to buy a Wagon R, then your demand is for a Wagon R not a sports car. But on the other hand if you go to a showroom with want, ability and intent to buy a sports car, but only wagon R is available and you buy it, then quantity demanded is One Sports Car not Wagon R, the sports car is the good
purchased but the good demanded is wagon R, these are interesting distinctions you should keep in mind. Also quantity demanded is a flow, so many units per period of time, if a consumer durable is the matter under study, then it is the services of that consumer durable per unit of time.

1 comment:

  1. Dear Munish, accidentally chanced upon your blogs! Lucid and well explained. Remembered how I had met you in IGIDR on a rainy day in 1995, while appearing for interview.
    Time has indeed passes and I am glad to note that you have been true to calling of Economics. I alas got lured by Civil Services, presently posted in Dehradun as Accountant General, Uttarakhand.
    All the best! And sincere regards to your father.
    Saurabh Narain