Q&A - What is market demand?

Demand is the quantity of a good or service that consumers and businesses are willing and able to buy at a given price in a given time period.

Market demand is the sum of the individual demand for a product from buyers in the market.  If more buyers enter the market and they have the ability to pay for items on sale, then market demand at each price level will rise.

In theory, the level of market demand at a range of prices can be shown graphically as a demand curve. Here is an example:

How useful is a demand curve? It is certainly useful for a business to be able to forecast what happens to potential demand from a change in price.  However, in reality, a business is restricted in its ability to change prices significantly and often.

Revision Presentation - Marketing Mix: Introduction to Pricing [17 May 2012]
Same product - different prices: Greggs sausage roll costs more in Hammersmith than Hull [9 May 2012]
Pampering - demand booms as consumers seek an affordable treat [4 Mar 2012]
Revision Presentation - Workforce Planning [26 Dec 2011]
Time for this Dragon to Cut Costs to Keep his Health Clubs Fighting Fit [11 Dec 2011]
Cut price cup cake deal goes wrong…... [22 Nov 2011]
Promotional Pricing at its Worst [7 Nov 2011]
Unilever hit by rising costs [6 Nov 2011]
An end to outsourcing? [18 May 2011]
Kate & Wills - A Short-term boost to demand [9 Apr 2011]
Is the role of inflation over inflated? [30 Mar 2011]
Protection for the endangered pasty [23 Feb 2011]
Revision games - Marketing Basics (True / False) [16 Feb 2011]
Michael Porter - Shared Value and the Limitations of CSR [15 Feb 2011]
Commodity prices in action - soaring Copper [6 Feb 2011]
Q&A - Distinguish between price and cost [2 Jan 2011]
Q&A - Should a business use a “loss leader” as part of its pricing tactics? [31 Dec 2010]
Business Pricing Tactics Under Scrutiny [12 Dec 2010]
Dominos Pizza - Growth & Strategy (Part 2) - Innovation, Service and Smart Operations [26 Nov 2010]
Segmentation & Pricing - the Ice-Cream Price Pyramid [17 Nov 2010]
Cash flow Clue-doh! The Mystery is Revealed… [2 Nov 2010]
Making the FT Brand Sweat! [19 Oct 2010]
Analysing the Business Data - Marriage in Decline [19 Oct 2010]
Who ate all the pies? [17 Sep 2010]
Pricing Strategy - Mobile Data Networks [14 Sep 2010]
Strategy in Action - Crocs Comes Back from the Dead [4 Sep 2010]
Lost in translation - demand from public sector to dry up? [4 Aug 2010]
Nissan profits from a recovery in demand [30 Jul 2010]
Demand for Foreign Holidays Takes a Sharp Dip [14 Jul 2010]
Lessons from the business model of King & Allen [13 Jul 2010]
World Cup 2010 Business Winners and Losers [13 Jul 2010]
Emerging from Recession - Manufacturing Leads the Way [1 Jun 2010]
The dangers of focus on one product [9 May 2010]
Corus chief calls for more government funds for the economy [8 Apr 2010]
Measuring changing shopping habits and inflation [15 Mar 2010]
BUSS4 Research - a Corus of Disapproval [1 Mar 2010]
Strategy in a recession - Don’t Panic Mr Mainwaring! [25 Feb 2010]
Managing a recruitment business through the recession [16 Feb 2010]
Taking Demand-based Pricing To Extremes [8 Feb 2010]
Video case study - substitute goods benefiting from the recession [1 Feb 2010]
Strategy in a recession - Fusion Systems [1 Feb 2010]
Business priorities in a recession [1 Feb 2010]
What business students can learn from how businesses have handled the recession [1 Feb 2010]
Demand and Supply in Sction - Haggis [25 Jan 2010]
Product, pricing and profitability in a changing market [20 Jan 2010]
Revision Presentation - Revenues and Demand [30 Dec 2009]
Q&A - When is it appropriate for a firm to use penetration pricing? [21 Dec 2009]
Q&A - Explain price skimming [21 Dec 2009]
Q&A - What is the difference between pricing strategies & tactics? [21 Dec 2009]
Q&A - Explain what is meant by price positioning [21 Dec 2009]
Q&A - What factors should a business consider when setting its prices? [19 Dec 2009]
Q&A - How does pricing link to the objectives of a business? [19 Dec 2009]
Q&A - What is price and why is it so important in the marketing mix? [19 Dec 2009]
Video Case Study - Luxury Sound Maker Ditches CDs [4 Dec 2009]
Outdoor Ice-skating heads firmly down the product life cycle [3 Dec 2009]
A tale of two bakers [16 Nov 2009]
Emerging markets drive demand for oil [16 Nov 2009]
Survive and prosper - emerging markets in the global recession [5 Nov 2009]
Emerging Markets - China’s Growth in Charts [5 Nov 2009]
Halloween - packed full of business studies lesson ideas [3 Nov 2009]
Santa goes back to basics in attempt to reduce the cost of Christmas [29 Oct 2009]
Q&A - How are businesses affected by unemployment? [27 Oct 2009]
Q&A - What are the main causes of unemployment? [27 Oct 2009]
Q&A - Explain what unemployment is and how it is measured [27 Oct 2009]
Managing Cash Flow - Beware the Economic Recovery [26 Oct 2009]
Pricing strategies and tactics under investigation [15 Oct 2009]
Dyson launches a new premium product [14 Oct 2009]
Ukraine 1 England 0 - A match to remember? [12 Oct 2009]
Napster - Trying to compete, or getting desperate? [9 Oct 2009]
V-Water - from start up to exit [4 Oct 2009]
Strictly and X-Factor Drive Demand for Pizza [1 Oct 2009]
The lights go out for the nightclub market [26 Sep 2009]
A textbook example of how rising unemployment affects demand [23 Sep 2009]
Demand is booming for UK Cinemas [16 Sep 2009]
Protecting a brand - global giants struggle to fight off the counterfeit fakers [31 Aug 2009]
Video case study: battling for survival in the restaurant trade [31 Aug 2009]
Sony cuts the PS3 price to extend its life cycle [30 Aug 2009]
A dramatic fall in business investment [27 Aug 2009]
More trouble in the skies [27 Aug 2009]
Strategic business decision-making - Network Rail [26 Aug 2009]
Sainsbury’s and Diageo pitch in to battle [17 Aug 2009]
Own label brands profit from the recession [4 Aug 2009]
Demand and supply in action - tea prices surge [4 Aug 2009]
When the Steel Town Boomed [3 Aug 2009]
The Death of Newspapers - to be replaced by Nichepapers? [2 Aug 2009]
BA cuts out the cost of short-haul meals [29 Jul 2009]
One-handed eating changes the demand for knives [20 Jul 2009]
Microsoft and Google compete head-to-head [9 Jul 2009]
Welsh Business Benefits from the Ashes [8 Jul 2009]
Instore Takes a Pounding [6 Jul 2009]
Spare capacity prompts a fall in business investment [4 Jul 2009]
Swimsuit malfunction - a failure of quality or just the wrong size? [2 Jul 2009]
U2 on Tour - Investment appraisal and capacity utilisation rolled into one! [2 Jul 2009]
Stock control - de-stocking was over £5bn in Q1 of 2009 [2 Jul 2009]
Q&A - Outline the main costs and benefits of inflation [1 Jul 2009]
Q&A - Explain the causes of inflation [1 Jul 2009]
Q&A - What is inflation and how is it measured? [1 Jul 2009]
East Coast Rail Line is Nationalised [1 Jul 2009]
Recession Bites - new food shopping habits [29 Jun 2009]
Budget Hotel Chain Now Feeling the Squeeze [17 Jun 2009]

BUSINESS TEACHER RESOURCE NEWSLETTER
Get first news of business teaching resources, ideas and other materials from tutor2u. Over 9,400 business teachers from the UK and around the world receive our regular teacher email newsletters. Sign up for free here!