What is Demand ?

       
 Demand

In the ordinary sense, the term desire, want and demand have the same meaning. But in economics, these terms have different meaning.

Desire - means a mere wish to have a commodity.

Want - is a an effective demand.

Desire will be effective when have means to buy it and also are ready to spend on it. Want, therefore contains the three elements :

1. desire for a commodity

2. means to buy

3. readiness to spend

Want will become demand when a person is ready to purchase the specific quantity of the commodity at a specific price. The term 'Demand' is made to show the relationship between the price of a commodity, which a consumer wants to purchase at a specific price, time and place.

ex- if we say that we buy 2 litres of milk at Rs 60 per litre, then 2 litres of milk will be called a demand because it has all the three essentials for demand, namely quantity, price and time.

Features of Demand 

The demand has the following four features:

1. Specific Quantity : A specific desired quantity which a person is willing to purchase. it is not an approx, it has to be in numbers.

2. Price : The demand is always at a price. The consumers must state the price at which he is prepared to buy commodity.

3. Time : Demand must mean demand per unit time, per month, per week or per day.

4. Market : Demand is always held in market. Market is a set of points of contact between buyers and sellers. It needs not be a definite geographical area.

Types of Demand 

1. Joint Demand - When a commodity is jointly demanded with some other commodity, we call it joint demand. It exists when two or more goods are required together to satisfy a particular want. 

ex - Pen and Ink , Cars and Petrol, etc.

2. Composite Demand - The demand for a commodity which can be put into several uses. ex - milk is used for preparing cheese, curd, butter, sweets, etc.

3. Direct Demand - The demand for such commodities which is directly demanded by a consumer for the satisfaction of his want. ex - food, clothes, house, etc.

4. Derived Demand - Thing needed to produce some other goods, which we need. ex- demand of a house is direct but demand of bricks, cement, iron is derived from the demand of house. is the house demand goes up the good demand also rises.

5. Competitive Demand - When two commodities are substitutes of each other, the increase in the quantity of one good will reduce the demand of other. ex - Maggi and Yippe, Tea and Coffee.