Which term refers to the willingness and ability of buyers to purchase a good or service?

Which term refers to the willingness and ability of buyers to purchase a good or service?

• A. Market Forces
• B. Demand
• C. Market Demand
• D. Elasticity

Answer: (A)

Demand is the willingness and ability of buyers to purchase a good or service. It combines both desire and the means to pay, so if people want something but cannot afford it, there isn’t true demand. When we talk about quantity demanded, we’re looking at how much buyers would buy at a specific price, and the law of demand says that, all else equal, as price falls, quantity demanded tends to rise. It’s useful to distinguish this from market demand, which is the total demand for a good across all buyers in the market at each price. The other terms aren’t describing the buyers’ willingness and ability: market forces cover the broader pressures in a market; elasticity measures how responsive quantity demanded is to price changes.

Demand is the willingness and ability of buyers to purchase a good or service. It combines both desire and the means to pay, so if people want something but cannot afford it, there isn’t true demand. When we talk about quantity demanded, we’re looking at how much buyers would buy at a specific price, and the law of demand says that, all else equal, as price falls, quantity demanded tends to rise.

It’s useful to distinguish this from market demand, which is the total demand for a good across all buyers in the market at each price. The other terms aren’t describing the buyers’ willingness and ability: market forces cover the broader pressures in a market; elasticity measures how responsive quantity demanded is to price changes.