The fundamental difference between demand and quantity demanded is that while demand simply denotes the willingness and a person’s ability to purchase. As against this quantity demanded represents the amount of an economic good or service desired by consumers at a fixed price.
Have you ever observed why the inessential things like diamonds, platinum, gold are very expensive, whereas necessities like food, clothes, water are inexpensive? The only answer to this question is the law of demand, which determines how consumer demand is affected by different factors like price, income, substitute or complementary goods, tastes & preferences and so forth.
Many people often juxtapose the terms demand and quantity demanded in this context. So, let’s take a look at this article in which we’ve simplified the differences.
Content: Demand Vs Quantity Demanded
|Basis for Comparison||Demand||Quantity Demanded|
|Meaning||Demand is defined as the willingness of buyer and his affordability to pay the price for the economic good or service.||Quantity Demanded represents exact quantity (how much) of a good or service is demanded by consumers at a particular price.|
|What is it?||It lists out quantities that would be purchased at various prices.||It is the actual amount of goods desired at a certain price.|
|Change||Increase or decrease in demand||Expansion or contraction in demand.|
|Reasons||Factors other than price||Price|
|Measurement of change||Shift in demand curve||Movement along demand curve|
|Consequences of change in actual price||No change in demand.||Change in quantity demanded.|
Definition of Demand
Demand is defined as the amount of product or service that a consumer or a group of consumers are willing and able to buy at different prices, at a given period. A simple desire to purchase a commodity does not constitute demand as it is not effective, however, ‘desire’ is the major component of it. Effective demand is a combination of three elements, desire, means to purchase and willingness to utilize those means for buying. A demand is not considered as demand if it is not supported by the ability to pay the price of the product.
Therefore demand can be explained at different quantities of a product or service, which could be purchased at various prices/income/price of related goods at a given period. The figure given below represents the shift in demand curve due to various factors such as income, taste or preferences, the price of complementary or substitute goods etc. The rightward shift represents an increase in demand and the leftward shift is an indicator of the decrease in demand.
Definition of Quantity Demanded
Quantity Demanded refers to how much of an economic good or service is demanded by a consumer or a group of consumers at a given period at a certain price. There are two important points related to quantity demanded which are,
- It is always expressed at a given price, in essence, different quantities are demanded at different prices.
- It is a flow which means quantity demanded doesn’t indicate a single purchase rather a continuous flow of purchases.
The given below figure represents the movement along demand curve due to changes in price, i.e. the upward movement of demand curve indicates the contraction of demand whereas a downward shift denotes the expansion of demand.
Key Differences Between Demand and Quantity Demanded
The following points are noteworthy so far as the difference between demand and quantity demanded is concerned:
- Demand is defined as the willingness of buyer and his affordability to pay the price for the economic good or service. Quantity Demanded represents an exact quantity (how much) of a good or service is demanded by consumers at a particular price.
- Demand refers to the graphing of all the quantities that can be purchased at different prices. On the contrary, quantity demanded, is the actual amount of goods desired at a certain price.
- When a person talks about increase or decrease in demand, it means the change in demand. Conversely, if a person talks about expansion or contraction of demand, he refers to the change in quantity demanded.
- Changes in demand are due to the factors other than price, i.e. income, the price of complementary goods, the price of substitutes, etc. On the other hand, changes in quantity demanded is due to price.
- Change in demand will result in the shift in the demand curve. As opposed to quantity demanded, where the change may lead to the movement along the demand curve.
Demand is inversely related to price, i.e. with the increase in price, the demand for the product or service decreases whereas a decline in the price of the product or service may cause a rise in its demand. Further, it can be represented by a curve that shows the relationship between price and quantity demanded. On the other hand, quantity demanded is a particular point on the demand curve.