Economics: How to differentiate between demand and quantity demanded

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Economic theory contains many laws that pertain to the concept of supply and demand. These two basic components are a strong foundation of economic law and theory. For the demand factor, there are variables within the theory of demand. Demand and quantity demanded can be a confusing concept. The reason for this is partially because they sound so similar and, when many people talk about demand, what they really mean is quantity demanded.


The demand segment of economics surrounds the concept of need. Needs are what people see as a requirement in their daily lives. The economic law of demand dictates, all other factors being equal, the more expensive a good, the less of that item people demand. It is this perceived demand that affects the price. When the price of specific goods drop, all other things being equal, people will be more inclined to buy more of those items. 

When demand of an item changes, this means the demand curve shifts. There are a few factors which may influence this:

  • Changes in customer preferences takes place
  • Price of complement or substitute goods shift
  • Level of income goes up or down
  • Buyer population changes
  • Expectations of price change

If one or more of these factors occur, this impacts the direction of the demand curve.


To understand quantity demanded it is helpful to understand elasticity. Elasticity is defined as the level of flexibility people have in purchasing an item. Some items are totally elastic and have substitutes. The higher number of substitutes available, the more elastic that item is. On the other hand, some items are inelastic - this means regardless of price, people will continue to buy because there are no viable substitutes for an item. The level of elasticity has a direct effect on demand and quantity demanded.

Quantity demanded

When economists refer to quantity demanded they are talking about the maximum quantity buyers want to buy at the specified price. While quantity demanded is directly related to laws of demand, it does not necessarily correlate with demand itself. What this essentially means is that when the price of something drops, people demand more of the item because it is priced attractively enough where they want to buy more, and the quantity of the item they normally buy increases. Consequently, when the price increases, people tend to demand less of the product because they aren’t willing to pay a higher price, or top dollar, for the same item.

When the quantity demand changes with respect to the cost of an item, this is referred to as the elasticity of demand. The demand curve itself doesn’t change, but the quantity demanded is affected.

Example of demand vs. quantity demanded

Essentially, when prices are higher, people will demand less quantity. People need to eat, and this is an absolute factor that cannot be altered. Regardless of price people will buy food, making food an inelastic purchase. However, the kinds of foods purchased are generally pretty elastic because there are many substitutions of the kinds of food people can buy. The price of food is impacted by the shopping choices people make.

An example:
While people need to eat, they do not necessarily need to have oranges in order to do so. Sure the human body requires vitamin C, and many people turn to oranges or orange juice to get it. However, people can easily find this in other forms. If the price of oranges goes sky high, people are going to be more inclined to find another source of vitamin C that is more affordable; this is known as a substitution.

As a result, the quantity of the number of oranges demanded will go down. While vitamin C is inelastic and in demand, the sources of obtaining it are very elastic. On the other hand, say a grocery store decides to hold a huge sale on oranges. This is going to affect the amount people want to buy and change the quantity demanded. Since oranges are more affordable, the quantity demanded will increase because the price of this product is much more appealing.

There are many factors of supply and demand that will impact both demand and quantity demanded. If you can remember that the demand curve is a pictorial graph of the relationship that exists between price and quantity demanded, this should help you differentiate between demand and quantity demanded. Demand is the overall consumer need of a product, while the quantity demanded is the actual number of the items desired.


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