Demand

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DEFINITION of 'Demand'

An economic principle that describes a consumer's desire and willingness to pay a price for a specific good or service. Holding all other factors constant, the price of a good or service increases as its demand increases and vice versa.

INVESTOPEDIA EXPLAINS 'Demand'

Think of demand as your willingness to go out and buy a certain product. For example, market demand is the total of what everybody in the market wants.

Businesses often spend a considerable amount of money in order to determine the amount of demand that the public has for its products and services. Incorrect estimations will either result in money left on the table if it's underestimated or losses if it's overestimated.

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