Question

State with reason whether you agree or disagree with the following statement:

All desires are demand.

Answer 1

I disagree with the given statement.

Reason:

1. In ordinary language, demand means a desire.
2. Desire means an urge to have something.
3. In Economics, demand means a desire which is backed by willingness and ability to pay.
4. E.g.: if a person has the desire to go on a vacation to Mauritius, but does not have the money to go there, then it will simply be a desire and not a demand in economic sense.
5. Thus, demand is an effective desire.
6. 
   

   Demand = Desire + Ability to pay + Willingness to spend

Therefore, all desires are not demand.