(a) Distinguish between wants and demand (b) With the aid of diagrams show the effect on demand when (i) there is a reduction in the number of 2200 consumer...

(a) Wants versus demand. A want is simply a desire or wish for a good or service; it is unlimited and need not be backed by anything. Demand in economics is an effective want: a desire for a good that is backed by both the willingness and the ability to pay, and expressed over a given period at a given price. Thus every demand is a want, but a want becomes demand only when purchasing power and willingness support it. A poor person may want a car (a want) but not demand it because he cannot pay.

(b) Effect on demand, with diagrams. Draw a demand curve \( DD \) on axes with price on the vertical axis and quantity on the horizontal axis, and distinguish a shift of the whole curve from a movement along it.

• (i) A reduction in the number of consumers. Fewer buyers reduce demand at every price, so the demand curve shifts leftward (inward) from \( DD \) to \( D_1D_1 \). This is a fall in demand, not a movement along the curve.
• (ii) A rise in the price of substitutes. When substitutes become dearer, consumers switch to this commodity, so its demand rises and the curve shifts rightward (outward) from \( DD \) to \( D_2D_2 \).
• (iii) A fall in the price of the commodity itself. A change in the good's own price does not shift the curve; it causes a downward movement along the same demand curve to a lower price and larger quantity demanded (extension of demand).

Examination reminder: a change caused by the good's own price is a movement along the curve; a change caused by any other factor is a shift of the whole curve.