In day-to-day language, we often consider meaning of demand as desire. Desire means an urge to have something. In Economics, demand means a desire which is backed by willingness and ability to pay. For example, if a person has the desire to purchase a television set but does not have the adequate purchasing power then it will be simply a desire and not a demand. Thus, demand is an effective desire. All desires are not demand.
It is useful to know what economists mean by the demand of the goods by consumers. The demand for a commodity is essentially consumers’ attitude and reaction towards that commodity. Demand for a good is in fact a photograph or a panoramic picture of consumers’ attitude towards a commodity. This consumers’ attitude gives rise to actions in purchasing units of a commodity at various given prices. Precisely stated, the demand for a commodity is the amount of it that a consumer will purchase or will be ready to take off from the market at various given prices in a period of time. This, demand in economics implies both the desire to purchase and the ability to pay for a good. It is noteworthy that mere desire for a commodity does not constitute demand for it, if it is not backed by the ability to pay. For example, if a poor man who hardly makes both ends meet, wishes to have a car, his wish or desire for a car will not constitute the demand for the car because he cannot afford to pay for it, that is, he has no purchasing power to make his wish or desire effective in the market. Thus, in economics unless demand is backed by purchasing power or ability to pay it does not constitute demand. Demand for a good is determined by several factors, such as, the tastes and desires of the consumer for a commodity, income of the consumer, the prices of related goods, substitutes or complements. When there is a change in any of these factors, demand of the consumer for a good changes. Individual consumer’s demand and market demand for a good may be distinguished. Market demand for a good is the total sum of the demands the individual consumers who purchase the commodity in the market.