Reviewed by Aug 27, 2020| Updated on
Quantity demanded refers to the aggregate value of the goods or services demanded by consumers in a stated period of time. The quantity demanded depends on the price of goods or services in the market. In economic terms, the price of the goods or services bears an inverse relationship with the quantity demanded.
Meaning of Quantity Demanded
Quantity demanded is one of the critical factors studied in the law of demand. The price of the goods or services has a direct impact on the quantity demanded. Apart from the price, there are other non-price factors too which have a bearing on the quantity demanded.
The price of the good or service has an inverse relationship with the quantity demanded. Higher prices of goods or services result in lower quantity demanded. Lower prices of goods or services result in higher quantity demanded. Hence, in most cases, the price has an impact on the increase or decrease in the quantity demanded.
The quantity demanded refers to the number of goods a buyer is willing to buy at a given price. The increase or decrease in the buyer’s requirement changes the quantity demanded. The same is represented by the slope of the demand curve.
In economics, a demand curve will show the relationship between the quantity of goods or services demanded and the price of such goods or services. If there is a change in the quantity demanded for a change in price, the same will be displayed by a movement along the demand curve. The proportion in which the quantity demanded changes for a change in price is known as the price elasticity of demand.
The quantity demanded is plotted on the X-axis, the price is plotted on the Y-axis. When the points of intersection of price and demand are joined, the demand curve displays the increase in quantity demanded for an increase in price.
There are more factors that influence the demand curve other than the price of the good or service. For example, if the goods are essential commodities or essential medicines, a change in the price will not change the demand positively or negatively. Then, the demand is inelastic at different prices. Thus, for a change in price, the demand may be elastic (demand changes), or it may be inelastic.