What does demand represent in economics?

Demand in economics refers specifically to the desire for a particular good or service, coupled with the ability and willingness to purchase it at a given price. This distinction is crucial because demand is not merely about wanting something; it involves having the financial means to actually buy it.

Option B correctly encapsulates this understanding by highlighting that the desire for a good or service must be supported by purchasing capacity. When consumers have both the desire and the means to pay for a good, they create demand in the market. For example, if someone desires a smartphone but does not have the money to buy it, that situation does not count as demand; it’s simply interest without the economic capacity to act on it.

When analyzing demand, economists look at factors such as income levels, pricing, and preferences to understand how much of a good or service consumers are willing to buy. This comprehensive view allows for a better assessment of market behaviors and price dynamics.