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Quantity Demanded

What is 'Quantity Demanded'

Quantity demanded is a term used in economics to describe the total amount of goods or services demanded at any given point in time. It depends on the price of a good or service in the marketplace, regardless of whether that market is in equilibrium. The degree to which the quantity demanded changes with respect to price is called the elasticity of demand.

Explaining 'Quantity Demanded'

Quantity demanded is meant to represent the amount of goods or services demanded for a specific price point. Assuming nonprice factors are removed from the equation, a higher price results in a lower quantity demanded, and the opposite is true. Quantity demanded is directly related to the law of demand, which states the price and demand are inversely related.

An Example of Quantity Demanded

Say, for example, at a price of $5.00, the quantity demanded for hotdogs is two. Using a standard demand curve, the quantity demanded is depicted as a point on the downward sloping line, with the price of hotdogs on the Y-axis and the quantity of hotdogs on the X-axis. This means that as price decreases, the quantity demanded increases.

Price Elasticity of Demand

The quantity of a good or service demanded at a given price level is affected by its price elasticity. A good or service that is highly elastic means the quantity demanded varies widely at different price points. Conversely, a good or service that is inelastic is one with a quantity demanded that remains relatively static at varying price points. An example of an inelastic good is insulin. Regardless of price point, those who need insulin demand it at the same amount.


Further Reading


Keynes's finance motive
www.jstor.org [PDF]
… 1937 review and restatement of his ideas, Keynes introduced a new and some- what novel purpose for demanding money, namely … following Appendix, it is demonstrated that if, and only if (x = f (that is, if the additional quantity of transactions money demanded for an …

Taxing snack foods: manipulating diet quality or financing information programs?Taxing snack foods: manipulating diet quality or financing information programs?
academic.oup.com [PDF]
… 1937 review and restatement of his ideas, Keynes introduced a new and some- what novel purpose for demanding money, namely … following Appendix, it is demonstrated that if, and only if (x = f (that is, if the additional quantity of transactions money demanded for an …

Oligopoly and financial structure: CommentOligopoly and financial structure: Comment
www.jstor.org [PDF]
… 1937 review and restatement of his ideas, Keynes introduced a new and some- what novel purpose for demanding money, namely … following Appendix, it is demonstrated that if, and only if (x = f (that is, if the additional quantity of transactions money demanded for an …


Q&A About Quantity Demanded


What does the term quantity demanded mean?

The term quantity demanded means the total amount of goods or services demanded at any given point in time.

What are two examples of an inelastic good?

Insulin and gasoline are two examples of an inelastic good.

How do elasticity and supply interact with each other on a graph?

As one increases, so does the other.

How is elasticity of demand measured?

Elasticity of demand is measured by how much the quantity changes with respect to price.

What does a standard demand curve show?

A standard demand curve shows the relationship between price and quantity demanded.

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