What is Economic Demand? Economic demand is an economic concept that refers to an individual’s willingness to pay for a product and/or service, and the actual demand of that product or service by consumers in an economy. Market demand is the amount wanted by consumers in an economy for any given good or commodity. The supply of that good or commodity, as the term implies, is inversely related to the demand of it.
In the simplest form, economic demand can be understood as the amount of a commodity (good or service) an individual actually uses on a daily basis. This is expressed as a simple price equation known as the Phillips Curve.
On this curve, economic demand, or the average amount desired, represents the downward slope of the curve. Conversely, economic supply represents the upward slope of the curve. There are two main factors that determine the size of the economic supply curve – namely, demand and supply elasticity.
If the demand curve of the economy is flat or slightly upward sloping, then the economic demand is likely to remain at its current level. At this point, there will be no need for further increase in the supply of that good and the price will be at its present level. If however, the demand curve slopes downward or becomes steeper, then there is likely to be an increase in the supply of that good and the price will eventually become higher.
However, the degree to which the economic demand decreases (slopes upward) or increases (slopes downward) is dependent upon how the economy is currently performing. The degree of growth of the demand in relation to the economy’s performance, or, more accurately, the efficiency of the economy’s performance, determines how much the supply curve will increase.
In order to understand the relationship between economic demand and supply, one must first understand what economic demand is not. Economic demand is not demand for some good or commodity. The word “demand” is used in relation to an idea or an object.
The word “demand” in economics refers to the amount of something that a person or group wants. In most cases, when someone is faced with a problem such as lack of money or a need for something, they will first try to solve it through monetary means. For example, if a person cannot pay for their car repair, they may try to borrow some money from their friends or family. However, if their friends and family have a good credit rating, they would not be able to borrow as much money.
To determine economic demand, we must first understand what an economic good or commodity is. A good or commodity, in economics, is a commodity that is a necessity in today’s society. It is used by consumers in order to fulfill their basic needs.
For example, a good or commodity that a person uses to get to work or school, food to eat at home, a vehicle to drive to and from work, clothes to buy groceries, television to watch television, etc. It is also useful in providing pleasure or recreation to consumers. In this sense, it is a commodity, but in another sense it is a need or a desire. If a person or a group of people are not able to afford to purchase all of these items in the present economy, it can either be called unimportant or even a waste of money.