Using examples from your personal experience or work experie

Using examples from your personal experience or work experience, how would you explain the difference between quantity demanded and demand (or quantity supplied and supply) to someone who has not studied Economics? Based on your example, why is the distinction important?

Solution

We are all consumers and we all demand goods and services. Demand is derived from consumers\' tastes and preferences, and it is bound by income. In other words, given a limited income the consumer must decide what goods and services to purchase. Within his budget, the consumer will purchase those goods and services that he likes best. Each consumer will purchase different things because individual preferences and incomes differ. The law of demand holds that other things equal, as the price of a good or service rises, its quantity demanded falls. The reverse is also true: as the price of a good or service falls, its quantity demanded increases. This law is a simple, common sense principle. Lets assume the price of oranges is1$ at this price quantity demanded by a particular consumer is 10., the price goes up to $2 now the quantity demanded will be 5 and so on.

It is extremely important to understand the difference between demand and quantity demanded.

Demand
• refers to the entire relationship between prices and the quantity of this product or service that people want at each of these prices.
• should be thought of as \"the demand curve.\"

Quantity demanded
• refers to one particular point on the demand curve (not the entire curve).
• refers to how much of the product is demanded at one particular price.
• is the horizontal distance between the vertical axis and the demand curve.