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Net Demand

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PPGPortal > Home > Concept Dictionary > N, O > Net Demand
 

Net Demand 

If we are studying a two good model in which the consumer begins with an endowment, the consumer’s net demand for a good is his gross demand minus his endowment of that good.

(Dwayne Benjamin, Toronto PPG 1002H) 

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Let us imagine somebody who enters a market which trades only potatoes and carrots. He brings to the market 5 potatoes and 5 carrots. If, after making his exchanges, our consumer leaves with 7 potatoes and 4 carrots we can say that his net demand for potatoes was 2. The consumer’s net demand for carrots was negative 1. This means that our consumer was a net buyer of potatoes and a net seller of carrots.

     

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