Demand can be defined as the quantity of a product that consumers are able and willing to purchase at a particular price during a specified period of time provided that other things remain constant (i.e. under ceteris paribus assumption).
The above definition of demand is from consumers' point of view. Producers also buy commodities. For them, demand is the quantity of a resource such as labor or raw material that producers are able and willing to purchase during a specified period of time provided that other things remain equal.
It is important to note that the consumer or producer must be willing and able to purchase the said quantity of a commodity. If a person is willing to purchase a product but is not able to purchase it, it won't be considered as demand. Also if a person is able to purchase a certain quantity of a product but is not willing to purchase it, this won't be considered demand.
Demand is usually recorded as a demand schedule which shows the quantity of a product demanded at each of a series of various prices. The demand schedule when plotted generates a curve shaped graph which is known as demand curve.
The demand of a single consumer or producer is called individual demand whereas the combined demand of all the consumers or producers is called market demand.
The following table shows the quantity of t-shirts demanded per year by a hypothetical consumer A at each of a series of various prices:
The above demand schedule shows that A's demand for t-shirts during one year is 18 shirts at unit price $10, 12 shirts at unit price $20, 9 shirts at unit price $30 and so on. The inverse relationship between quantity demanded and unit price has been recorded as an important microeconomic law called law of demand.
Written by Irfanullah Jan