Google
Monday 
June 27, 2022 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
REGULATORY PRICING: Government control over the price charge in a market, especially by a firm with market control. Price regulation is most commonly used for public utilities characterized as natural monopolies. If allowed to maximize profit without restraint, the price charged would exceed marginal cost and production would be inefficient. However, because such firms, as public utilities, produce output that is deemed essential or critical for the public, government steps in to regulate or control the price. The two most common methods of price regulation are marginal-cost pricing and average-cost pricing.

Visit the GLOSS*arama


QUANTITY DEMANDED:

The specific quantity of a good that buyers are willing and able to buy at a specific demand price. The key word is "specific." Quantity demanded and demand price form matched pairs--one quantity, one price. The combination of all price-quantity pairs is then what constitutes demand. The demand curve is a plot of the quantity demanded at each demand price.
Quantity demanded is the maximum quantity that buyers are willing and able to buy at a given price. The primary influence on quantity demanded is the demand price. The quantity demanded is generally less if the demand price is higher and more if the demand price is lower.

Constrained by Satisfaction

Buyers bump into a maximum quantity demanded for a given demand price due to the satisfaction received from consumption. Because the satisfaction generally falls with the quantity consumed, buyers are willing to pay a lower price as the quantity demanded increases. Buyers are willing to buy a larger quantity if the price received declines to match the falling satisfaction. Should they try to consume too much, beyond the maximum quantity demanded, satisfaction falls short of the price paid.

Consider the hot fudge sundae buying activities of Duncan Thurly. Duncan is willing and able to buy one Hot Momma Fudge Bananarama Ice Cream Sundae a week at a $3 demand price. This price matches the satisfaction Duncan receives from this Hot Momma Fudge Bananarama Ice Cream Sundae. However, should Duncan try to consume a second sundae, the satisfaction falls short of this $3 price.

On the Demand Curve

As the maximum quantity that buyers are willing and able to buy, the quantity demanded lies ON the demand curve. In essence, the demand curve plots the range of quantities demanded for a range of demand prices.

Consider the demand curve for electronic calculators displayed in the exhibit to the right. For a demand price of $45, the quantity demanded is 10 calculators. Would calculator buyers be willing to buy fewer than 10 calculators at this price? Certainly. In so doing, they receive more satisfaction than the price paid. Would calculator buyers be willing to buy more than 10 calculators at this price? Certainly not.

The story is the same for any quantity. Only the numbers differ. For a demand price of $15, the quantity demanded is 70 calculators. Buyers are willing to buy fewer than 70 calculators at this price, but not more.

Quantity Demanded, Not Demand

While the two terms are occasionally confused, quantity demanded is not the same as demand.
  • Quantity demanded is the specific quantity that buyers demand at a specific demand price. Quantity demanded is matched up with a specific price. Should the price change, then so too does the quantity demanded. Quantity demanded is a single number.

  • Demand, however, is the range of prices and quantities. It is all price-quantity pairs that make up the demand curve. Demand is a whole range of numbers.

<= QUANTITYQUANTITY SUPPLIED =>


Recommended Citation:

QUANTITY DEMANDED, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2022. [Accessed: June 27, 2022].


Check Out These Related Terms...

     | demand price | law of demand | demand schedule | demand curve | demand space | consumer surplus | demand determinants | change in demand | change in quantity demanded | quantity supplied |


Or For A Little Background...

     | demand | market | quantity | opportunity cost | unlimited wants and needs | economic analysis | exchange | scarcity | good | service | satisfaction |


And For Further Study...

     | market demand | price | competition | value | consumer sovereignty | competitive market | efficiency | utility analysis | price elasticity of demand | consumer demand theory |


Search Again?

Back to the WEB*pedia


APLS

PURPLE SMARPHIN
[What's This?]

Today, you are likely to spend a great deal of time looking for the new strip mall out on the highway hoping to buy either a package of blank rewritable CDs or yellow cotton balls. Be on the lookout for small children selling products door-to-door.
Your Complete Scope

This isn't me! What am I?

A half gallon milk jug holds about $50 in pennies.
"It is very rare that you meet with obstacles in this world (that) the humblest man has not the faculties to surmount. "

-- Henry David Thoreau, philosopher

NLREG
Nonlinear Statistical Regression
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2022 AmosWEB*LLC
Send comments or questions to: WebMaster