Q.Distinguish between 'desire' and 'demand' as used in economics.

Not every wish for a commodity counts as demand in the economic sense.

A desire is simply a wish to possess or use a commodity — it need not involve any purchasing power at all; wanting a luxury car one cannot afford is a desire. This wish becomes demand in the economic sense only when two further conditions are met: (i) the person is willing to pay for the commodity, and (ii) the person has the ability (purchasing power) to pay for it — and both must hold at a given price and over a given period of time. Thus every demand is a desire, but not every desire is a demand. For instance, a poor person may desire an expensive watch but, lacking purchasing power, does not create economic demand for it; a rich person who both wants it and can pay for it does.

Treating 'demand' as synonymous with 'need' or 'want' without mentioning purchasing power — in economics, an unaffordable want is never 'demand'.