Definition of demand
Demand refers to the willingness and ability of consumers to purchase a given quantity of a good or service at a given point in time or over a period in time.
In economics, demand is formally defined as ‘effective’ demand meaning that it is a consumer want or a need supported by an ability to pay – namely a budget derived from disposable income. Income provides individuals with a purchasing power which they excercise in a market through effective demand.
There are several theories of demand including:
Marginal utility analysis
Indifference curve analysis
Revealed preference theory