Definition: Quantity demanded in economics is the amount of a particular good or service consumers demand and are driven to purchase based on the product’s price. Usually, quantities demanded are not the same at different price levels. This price elasticity usually shows the higher the price, the lower the quantity consumers are willing and able to purchase.
What Does Quantity Demanded Mean?
What is the definition of quantity demanded? The economic quantity demanded is affected by variations in price only if the other determinants of demand remain unchanged. For example, changes in consumer spending can impact on the demand for a product but not the quantity demanded.
In contrast, an upsurge in the price of a product makes consumers reluctant to buy this product, whereas a reduction in the price of a product makes consumers more driven to buy this product. Factors that have an impact on quantity demanded are changes in the price, a recession, or changes in consumer preferences.
Let’s look at an example.
Beth loves eating apples. However, the last time she went to the grocery store she found out that the price per pound of apples increased from $4.80 to $5.68 per pound. Beth has recently lost her job, and she cannot afford to buy the same quantity of apples that she used to buy with the old price of $4.80.
Before the rise in the price of apples, Beth was buying 3 pounds of apples per week paying $14.40 per week for apples. Now that the price went to $5.65, Beth buys 2.5 pounds of apples paying $14.20 per week for apples. The quantity demanded decreases by 0.5 pounds due the increase in the price of $0.88, but Beth still has a strong urge for apples. Therefore, the demand is the same.
Now, we assume that Beth hasn’t lost her jobs and that she can buy the same quantity of apples with the new price. Beth can afford to buy 3 pounds for $5.68 per pound paying $17.04 per week for apples. The quantity demanded remains the same in spite of the increase in the price by $0.88 because Beth’s income (a determinant of demand) increased.
Define Quantity Demanded: Economic quantity demanded is number of goods or services consumers are willing and able to purchase at a given price level.