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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 ?
If customers order products and expect to have them delivered in three to five days, NYC can help establish a system that can meet those consumer demands.
played a critical role helping regional grid operators achieve significant reductions in end-user demand in order to avert potential blackouts.
Such risks and uncertainties include our ability to meet release schedules, customer demands, accomplish development goals, integrate our products, and deploy integrated solutions.
Supply & Demand Chain Executive 100 showcases providers of real-life supply chain implementations; Stellent selected for supplier extranet deployments at Emerson Process Management
GXS, a leading provider of business-to-business (B2B) e-commerce solutions, announced today that it has been named to the 2005 Supply & Demand Chain Executive 100 for three years running.
Uppal leads the overall strategy, product direction and development team at NextLinx, continuously providing programs, solutions and products that meet the demands of the global trade market.
JRG helps manufacturers Build-to-Consumption -- connecting factories directly to retailers so that they can schedule and re-schedule production daily based on retailer demand.
The company's scalable On Demand video server delivers up to 120,000 simultaneous streams from a single site, without content duplication or hidden storage costs, meeting the demands of VOD today and the future content needs of Everything On Demand.
Manufacturers around the world are caught in a crossfire between increasing customer demands, mounting global competition, and financially strapped suppliers," said Andy Carlson, vice president of product marketing, PeopleSoft Manufacturing and Supply Chain Management.
Global eXchange Services offers a diverse service portfolio that we continue to refine for customers faced with evolving supply chain standards and demands.