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Definition of Market Demand:
The market demand
for a good or service is the quantity people are willing to purchase of the good or service with their limited income at the prevailing set of prices over a specified period of time. The market demand equals the total of all individual demands.
One individual may have no need for a good, and the price would have to be very low to attract him to purchase the good. Another is loyal to a substitute product. She would only purchase the good if its price is much lower than the substitute. Another consumer loves the product and is willing to purchase it even if its price is much higher than the competitive brands. This consumer has an relatively inelastic demand for the good. All of us are different and have different individual demand curves. For some of us, the price will be too high. For others, the price will be low enough for us to purchase more. However, when every consumer is combined we form the market demand
for the good. As a group, we influence the price of a good or service by the intersection with the supply curve. We also determine if the demand is elastic or inelastic at a given price.
Dig Deeper With These Free Lessons:
Demand - The Consumer's Perspective
Changes in Demand - When Consumer Tastes Change
Supply and Demand - Consumers and Producers Reach Agreement
Supply and Demand - The Costs and Benefits of Price Controls
Supply and Demand - Understand the Dynamics of The Stock Market