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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 ?
Other demanders remain off their demand curves temporarily.
In Figure 7, each individual demander is purchasing only [qs.
The demander desires to use one song on her program.
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.
Multiplying the probabilities times the expected costs of being in such a segment yields the expected travel costs to the demander of not having the ith PRO, [15]
The problem of shareholders not being involved in control is familiar in the for-profit world, but inactivity on the part of nonprofit demanders has more severe consequences.
For a bona fide nonprofit organization, organizational objectives are linked to the aggregated demands of those nonprofit demanders who signal their dissatisfaction with for-profit provision or a particular good or service.
These demand-side stakeholders who will benefit from the operation of such a firm may be called nonprofit demanders.
In previous studies, in single-unit demand environments, the English clock auction tends to generate the competitive equilibrium outcome, which occurs if all demanders use their dominant strategy.
Our two-unit demanders behaved like two separate single-unit demanders.
The necessary coalition of low and high demanders in support of the monopoly proposal never materializes in the case of linear demand and uniform distribution of individuals.
The support for the monopoly alternatives comes from both low end (20%) and upper end (36%) demanders.