Question

Which element is essential for demand?

• A. Desire to consume
• B. Given price
• C. Willingness to spend factor
• D. All of these

Hint:

Demand = Desire + Ability to Pay + Willingness to Pay. All three are essential.

Answer 1

The Correct Option is D

In economics, "demand" is more than just a desire for a product. It is an effective desire, which means it must be backed by certain essential elements:

Desire to consume: There must be a want or need for the commodity.
Willingness to spend (Purchasing power): The consumer must have the necessary money or resources to buy the commodity.
Given price and time: Demand is always expressed with reference to a specific price and a specific period. The willingness to buy is linked to what one has to pay.
All the listed elements are necessary for a desire to be considered economic demand. The option (C) "Willingness to spend factor" implies having the purchasing power and being ready to use it.