In common conversation demand and desire are synonymous words and can be substituted, but in economics both refers to different meaning.

e.g. A person may have a desire for a car but have not enough money to buy. So his desire for a car can not be a demand.

From the above example we may derived the characteristics of a demand.

Characteristics:

The demand for any good or service may exist if:

1. Availability of purchasing power exists.
2. existence of willingness to spend the money
3. Willingness to pay (price) in term of money.

Demand price.

The price that a particular buyer wants to pay for a certain commodity is called Demand Price.

Distinction between Demand price and Market Price.

If the price of a car in the market is Rs.400,000 but the intensity of want of the buyer is so high that he is prepared to pay Rs.450,000, then in this case Market Price is Rs.400,000 and Demand Price is Rs.450,000.

Demand Schedule

The demand Schedule is a list showing relationship between price and the related quantity of Demand.

This Schedule shows the various quantity demands at different prices.

Individual Demand Schedule

The demand schedule for an individual will tells that what quantity of the commodity individual wishes to buy at different prices.

Demand Curve

The relation between quantity demanded and price is graphically presented as Demand Curve.

A Demand curve is drawn by taking:

a)      quantity demanded on x-axis

b)      price on y-axis

In a figure the curve D representing a Demand Curve:

At point P in the demand curve:

Quantity demanded is 18 units at price level of Rs.15.

Shape of Demand Curve

A demand curve is more likely to be straight line convex to the origin. This is because so with the fall in price there is a progressively increase in quantity demanded.

The demand curve slopes downward from left to right, this is because of various reasons:

• The real income of old buyer increase.

• Entry of new buyers

• Substitution Effect.