Effective demand for a commodity is desire for that commodity backed by_______

Step 1: Analyze the question The question asks what must back a desire for a commodity so that it becomes effective demand.

Step 2: Explain the concept In economics, wanting something is not enough. A person may desire a car, a phone, or a house but have no means to buy it. That is just a wish, not demand.

Effective demand is the desire for a good that is backed by the ability and willingness to pay for it at a given price and time. It is the demand that actually shows up in the market and affects prices and quantities traded.

Step 3: Evaluate the options

• A. A wish for the lowest possible price: This is only a preference. It has no buying power behind it.
• B. Ability and willingness to pay: This matches the definition. The consumer wants the item and has the means and intention to buy it.
• C. Cash in one's pocket: Having cash shows ability, but not willingness. Someone can hold cash and still not intend to buy. Ability can also come from credit or a bank balance, so cash alone is too narrow.
• D. A promise to make payment: A promise is not purchasing power. Without the ability to pay, it does not make demand effective.

Step 4: Answer The correct option is B. ability and willingness to pay.

Exam tip: Remember "Effective demand = Desire + Ability + Willingness to pay." If an option has both ability and willingness, it is usually the right choice for demand definitions in JAMB.