What is the meaning of demand, Managerial Economics

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What is the meaning of demand

In economics, demand has a specific meaning distinct from its ordinary usage. In common language we treat 'desire' and 'demand' as synonymously. This is incongruent from its use in economics. In economics, demand denotes to effective demand that implies three things:

  • Desire for a commodity
  • Sufficient money to purchase the commodity, rather the ability to pay
  • Willingness to spend money to acquire that commodity

 


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