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The need or desire for a good, service, or asset among consumers at a given price. The amount of demand at a given price is determined by supply and the availability of similar or replacements goods and services, among other factors. While demand for some staple products is relatively constant regardless of price, most of the time the price has a large influence on the level of demand. Demand for a good or service tends to increase as its price decreases. See also: Law of supply and demand, Demand curve.


the amount of a product which is purchased at a particular price at a particular point in time. A demand curve is a line showing the relationship between the price of a product and the quantity demanded per time period over a range of possible prices. Demand curves are usually downward sloping, indicating that as the price of the product falls, more is demanded. The extent to which the demand for a product will increase as price falls (and the extent to which demand will drop if the price rises) depends on the product's price-ELASTICITY OF DEMAND. The demand for a product, however, is determined also by a variety of non-price factors. A demand function attempts to incorporate all the factors that have a statistically. significant influence on demand for example, consumers' incomes, the prices of substitute products, advertising, etc. Demand curves will shift if any of these factors change over time.

In practice, firms are unable to derive definitive demand curves because of incomplete information. For this reason many firms use a COST-BASED PRICING formula for determining prices, but allow for the influence of demand by varying the profit mark-up (see DEMAND-BASED PRICING, COMPETITION-BASED PRICING).

There are various methods a firm can use to ‘forecast’ demand, including time series analysis, barometric indicators and econometric models. See SALES FORECASTING.



effective demand

the WANT, need or desire for a product backed by the money to purchase it. In economic analysis, demand is always based on ‘willingness and ability to pay’ for a product, not merely want or need for the product. CONSUMERS’ total demand for a product is reflected in the DEMAND CURVE. Compare SUPPLY.
References in periodicals archive ?
The same may be said of the demand side of the market although in this case demanders have been able successfully to execute their utility-maximizing plans at all prices at and above equilibrium.
Collectively demanders are realizing consumer surplus equal to area A.
Other demanders remain off their demand curves temporarily.
First, if H [greater than] 5,000 (r [less than] 2), demanders will prefer per-use licenses and PROs will prefer blanket licenses.
In the model of section III, PROs set the price of the entire blanket, which provides the demander with unlimited play of the PRO's catalog.
The demander desires to use one song on her program.
Since this appreciation is dependent on the ability of the characteristics to satisfy the needs of the demanders, the preference provides a more exact indication of the purchasing pattern - and thus of the substitutability - than the product similarity.
Since the demanders are rarely aware of all these features, and since a concrete utility may be a result of different features, the purchase act is often considered to be a function of a group of utilities[9].
In line with Lancaster's theory[17] that demanders buy groups of features rather than products, their opinions regarding the similarity of products must also be determined by features.
Among the major Republican candidates, the gender support on Eventful is split fairly evenly, while Huckabee skews much older than his competitors with an average demander age of 35.
This auction has not been modeled to date in an independent private values environment in which demanders may wish to buy more than one unit.
However, their environment differs from ours in that market demand is stationary from period to period, and in that for their parameters, the strategy profile consisting of all demanders bidding truthfully always constitutes a Nash equilibrium, resulting in the competitive equilibrium revenue.