What is the difference between latent and effective demand?

Question

Urgently needed, economics test soon, do not understand topic. thanks (:

Answer 1

Demand is the quantity that consumer are able and willing to purchase at each conceivable price. Strictly speaking this definition effective demand, as opposed to latent demand , when the consumer is willing to purchase a good or services but unable to do so. Generally the term demand is always used to mean effective demand.

Latent demand exist when their is a willingness to purchase a good/services but when the consumers lack the real purchasing power to be able to afford the product. Latent demand is affected by persuasive advertising - where the producer is seeking to influence consumer tests and preference.

Only when the consumer's desire to buy something is backed up by the willingness and an ability to pay for it do we speak of demand.