In everyday talk, demand means wanting something. In economics it means more: wanting it, being able to pay for it, at a given price, over a set time.
The points to remember
- Willing to buy: the buyer wants the good.
- Able to buy: the buyer has the money to pay.
- At each price: demand is always tied to a price.
- Over a period: per day, per week or per year.
Example: bubble tea at €5 this week
Lea
Wants one and has €5. She is willing and able, so she is part of demand.
Sam
Wants one but has only €2. Willing, not able: not part of demand.
Noor
Has €20 but does not like bubble tea. Able, not willing: not part of demand.
Remember it as: Want it, can pay, at this price, in this time.
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When the price of a good falls, people buy more of it. When the price rises, they buy less. This is the law of demand. It holds ceteris paribus.
The café's price list
| Price of a cup | €6 | €5 | €4 | €3 | €2 |
|---|---|---|---|---|---|
| Cups sold per week | 20 | 28 | 40 | 60 | 100 |
Animated graph
Watch the graph build step by step in study mode.
The points to remember
- Price and quantity demanded move in opposite directions.
- Price on the vertical axis, quantity on the horizontal axis.
- The demand curve slopes down from left to right.
- A price change moves buyers along the curve.
Why buyers take more when the price falls
Money goes further
At €3 instead of €5, the same pocket money buys more cups.
Some people switch
Bubble tea is now cheaper than a smoothie, so some smoothie drinkers swap.
New buyers join
People who could not pay €5 can pay €3.
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Individual demand is what one buyer would buy at each price. Market demand adds up every buyer's quantity at each price.
Cups per week at each price
| Price | Lea | Sam | Noor | Market demand |
|---|---|---|---|---|
| €5 | 2 | 4 | 6 | 12 |
| €3 | 4 | 8 | 12 | 24 |
| €1 | 6 | 12 | 18 | 36 |
Animated graph
Watch the graph build step by step in study mode.
The points to remember
- Market demand = every buyer's quantity added at each price.
- Add across (the quantities), never up (the prices).
- More buyers push market demand further right.
The papers test this micro with one short Paper 2 question: define the term demand, for 2 marks.
Text A reports that demand for bus travel in the city rose after fuel prices went up.
Define the term demand.
Model answer plan
See the answer broken into clear points, with guidance on how each point earns marks.
Drawing a demand curve in the exam
- Label the axes P and Q, or Price and Quantity.
- Label the curve D.
- A title is not needed.
- In a 4-mark diagram question, a wrong label caps the answer at 3 marks.