The Theory of Demand
Demand is the desire for the commodity at various prices. It is how
much consumers wish to purchase, not necessarily how much they
actually succeed in purchasing. In the absence of purchasing power,
demand is not effective.
much consumers wish to purchase, not necessarily how much they
actually succeed in purchasing. In the absence of purchasing power,
demand is not effective.
Many people would wish to own a brand new car, a big house, but they have no effective demand for these items. In order for them to have a demand for these items, individuals must be able and willing to buy them. Hence the use of the term effective demand, which is the actual purchasing of the commodity. It is demand, which is backed up by money or ability to pay.