Demand (disambiguation) facts for kids

Demand is a key idea in economics. It means how much people want a certain product or service, and also that they have the money to buy it. If someone wants a new video game but doesn't have enough money, they don't have "demand" for it in the economic sense. But if they want it and can pay, then they create demand.

Understanding Demand in Economics

In economics, demand isn't just about wanting something. It's about being able to buy it too. When many people want something and can afford it, the demand for that item is high.

How Demand is Measured

Economists use tools to understand demand better:

• Demand Schedule: This is like a table that shows how many items people will buy at different prices. For example, a table might show that if a new phone costs $1000, fewer people will buy it than if it costs $500.
• Demand Curve: This is a graph that shows the same information as a demand schedule. It usually slopes downwards, meaning that as the price of something goes down, people tend to buy more of it.

Demand and Rising Prices

Sometimes, if there's a lot of demand for something, its price can go up.

• Demand-Pull Theory: This idea explains that prices (or inflation) can rise when people want to buy more goods and services than what is available. Imagine everyone suddenly wants the same popular toy. If there aren't enough toys for everyone, the store might raise the price because people are willing to pay more to get one.

Government's Role in Demand

Governments can also try to influence demand in the economy.

• Demand-Side Economics: This is an economic idea that suggests governments can help the economy grow by encouraging people to spend more. They might do this by cutting taxes, so people have more money to spend, or by spending money themselves on things like new roads or schools. This extra spending can increase demand for goods and services, which helps businesses and creates jobs.

See also

All pages with titles containing "Demand"