Demand
Demand describes the quantity customers are willing and able to buy at specified prices and conditions over a period. A demand relationship can reflect income, alternatives, competition and product quality as well as price. Distinguish demand from production capacity or a sales target. A model estimated from historical data may not remain reliable after market or strategic changes, so quantify uncertainty and use commercial judgment.
Worked example
Research estimates 1,000 units can be sold at $30 or 1,200 at $28, all else equal. The forecast is a market assumption, not a guaranteed order.
Common mistake
Do not use quantity produced as evidence of quantity demanded or assume a lower price always raises total profit.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Direct | September 2026–June 2027 |
| ACCA | PM | Direct | September 2026–June 2027 |
| FIA | FBT | Direct | September 2026–June 2027 |