Quantity Demanded

Published Jan 14, 2023

Definition of Quantity Demanded

Quantity demanded is the amount of a good or service that consumers are willing and able to purchase at a given price. That means it is the number of units of a good or service that consumers are willing to buy at different price levels. It is important to note that the quantity demanded is not necessarily the same as the amount that is actually purchased because that also depends on the quantity supplied.

Example

To illustrate this, let’s look at the market for apples. Assume the price of apples is USD 2.00 per pound. Now let’s say that the quantity of apples demanded at that price is 10 pounds. That means, at this price, consumers are willing and able to purchase 10 pounds of apples. Meanwhile, if the price of apples decreases to USD 1.00, consumers will demand more of them, and the quantity demanded will increase to 15 pounds.

However, it is important to note that this does not necessarily mean that 10 pounds (or 15 pounds, respectively) of apples will actually be purchased. That depends on the actual supply of apples, which may be higher or lower than the quantity demanded.

Why Quantity Demanded Matters

Quantity demanded is an important concept in economics, as it helps to explain how changes in price affect the demand for a good or service. When the price of a good or service increases, the quantity demanded decreases and vice versa. This is known as the law of demand and is one of the most fundamental principles of economics. Thus, understanding the concept of quantity demanded is essential for any economist or policymaker.