Much more common, however, are the cases when desire becomes demand as a result of the willingness of the one having the desire to pay the current market price either in money or in other goods. Suppose a certain individual desires to own an automobile. He has the money in the bank to pay for it, but hesitates to buy at the price named. Clearly, his desire in this case is nothing more than a desire. Certainly, it has not yet become a demand, for demand would mean a sale. Suppose, to continue the illustration, he decides to buy the automobile. Then his desire has become a demand.

We have assumed above that the demand for the automobile came as a result of an increase in the intensity of desire. It might, however, have come just as easily, or even more easily, from a lowering of the price. The principle of reducing prices to change desires into demands is significant in at least two respects. First, it is the underlying reason for price reductions on the part of retail merchants. Second, it shows that demands ordinarily increase with a fall in price. In fact, as price falls demand and desire tend to become equal. When any one says, therefore, there is little or no demand for a particular good, he means a demand at the current price. Any other assumption would be incorrect, for a proper lowering of the price would ordinarily create a demand sufficient to take the entire stock.