Distinguish between the following: (a) wants and effective demand; [5 marks] (b) demand schedule and
Distinguish between the following:
(a) wants and effective demand; [5 marks]
(b) demand schedule and demand e; [5 marks]
(c) individual demand and market demand, [5 marks]
(d) change in demand and change in quantity demanded. [5 marks]
Explanation
(a) Wants refer to the desire for goods and services. Wants are expressed but without the ability to pay the prices while effective demand is a want backed by the ability to pay the price. It is the quantity that is bought at a price.
(b) Demand schedule is a table that shows the quantities of a commodity buyers are willing to buy at different prices at a time while a demand curve is a graphical presentation of the information contained in the demand schedule. It is the locus of points showing the combination of prices and quantities demanded.
(c) Individual demand is the different quantities of a commodity which a consumer would buy at different prices at a particular time, while market demand is the total quantity of a commodity which all consumers are willing and able to pay for at a particular time.
(d) Change in demand occurs when at the same price different quantities of a good are bought. This is shown by a shift of the demand curve, while a change in the quantity demanded occurs when at different prices different quantities are bought. This is shown by a movement along the same demand curve.