It has been observed that many of the students do not understand the key concept of Demand vs. Quantity Demanded, which needs to be understood before studying other theories of economics. This article will reveal the hidden insights of Demand vs. Quantity Demanded. So let’s get started
Do you observe that the necessities of life like water, food, clothes, etc. are cheaper or inexpensive in the daily routine life while luxurious goods like gold, cars, etc. are expensive? The law which is working behind the scene is the law of demand. A law which tells us how much demand of a consumer or group of consumers is being affected by his/their income, price of a particular good, change in the prices of complementary and substitute goods, their taste and preferences, etc.
The key difference between demand and quantity demanded is, prior shows the willingness and ability of a person to purchase good while later one shows how much someone wants to buy at a certain price.
Demand and Quantity Demanded: Differences at Glance
There are 6 main differences between which are hereunder
1. Difference in Meaning
Demand represent or define the only the willingness and affordability of consumer for any economic good.
Quantity demanded represent or define the exact amount of good (how much) demanded by the consumer on a specific price level.
2. Difference in Concept
Demand provides the list of quantities which would be purchased at a different price level.
Quantity demanded provides the actual quantity which is demanded at a specific price.
3. Difference w.r.t Change
Demand leads to an increase or the decrease in the demand curve.
Quantity demanded leads to expand or contract the demand curve.
4. Difference in Reasons working behind both
Demand is affected by many other factors and the price is one of them.
Quantity demanded is only affected by price.
5. Difference in Measurement/Movements
Demand leads to an upward or downward the shift in the demand curve.
Quantity demanded leads to a movement along the demand curve.
6. Difference w.r.t Consequences of Change in Price
With the change in the price level, no major change has occurred in demand.
Quantity demanded has also been changed with the change in price.
Demand vs. Quantity Demanded: A Graphical Elaboration/Presentation
What is Demand?
The demand depends upon the three major factors, first is “desire” to purchase a particular commodity, second is “availability of means” to purchase a particular commodity and third is “willingness” of the consumer to utilize available means to purchase a product/commodity. All of these three components are important for the creation of demand. If any of above-mentioned factors are missing then that it is not demanded because of only “availability of means” and “desire” does not lead to demand if the consumer is not willing to spend/consume them for the achievement of a particular commodity.
It is, therefore, decided that the purchase of different quantities of a particular good or service at different price levels/price of related goods/income is known as demand. Figure 1 shows the demand curve which is showing/representing the properties of demand by shifting the demand curve. This shift is caused by many factors like consumer’s taste and preferences, income level, price of substitute or complementary goods, etc. The curve D is the original demand curve while D1 is showing an increase in the demand and D2 showing a decrease in the demand curve.
Figure 1: Demand Curve showing/representing properties of Demand.
What is Quantity Demanded?
Quantity demanded shows/means how much a consumer or bunch of consumers buy an economic good or service at a given price level. Quantity demanded has two major points first it always defined at a given price level which means there should be different quantities at different prices. Second, it is a flow concept because quantity demanded is the continuous purchase of economic commodity or service rather a single purchase.
Figure 2 shows the demand curve which is representing the properties of quantity demanded. The demand curve D showing 3 different quantities at 3 different price levels. The movements along with the demand curve are the property of quantity demanded. The upward movement is showing contraction in quantity demanded while downward movement is showing expansion in quantity demanded.