Elementary Theory of Demand — Flashcards

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Demand means effective desire for a commodity, backed by the ability to pay and willingness to pay. It is more than a simple want. A person may desire many things, but demand exists only when there is…

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Demand requires three conditions: desire for a commodity, ability to pay for it, and willingness to pay its price. If any one of these is missing, demand is not formed.

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A mere want is only a wish, but demand is a wish with purchasing power and willingness to spend. For example, a poor person may wish to buy a car, but without ability to pay, it is not demand.

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Demand means the whole schedule of quantities a consumer is willing and able to buy at different prices during a given period. Quantity demanded means the amount bought at one particular price at one …

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Individual demand is the demand for a commodity by a single consumer or household at a given price during a given period of time.

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Market demand is the total demand for a commodity by all consumers or households in the market at a given price during a given time period. It is the horizontal summation of individual demands.

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A market demand schedule is formed by adding the individual demand schedules of consumers in the market at each price. For example, the demands of consumers A, B, and C are added price by price to get…

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A demand curve is the graphic representation of a demand schedule. It shows the relationship between price and quantity demanded. Price is shown on the Y-axis and quantity demanded on the X-axis.