MCAT® ExamCritical Analysis and Reasoning SkillsHard
A city council is debating whether to fund a new public park. One council member argues that while there hasn't been a vocal public demand for a park, building it could reveal a significant, unspoken desire for green spaces, which residents might not have articulated because they didn't believe it was an option. This argument appeals to the concept of:
- AExpressed Demand
- BInduced Demand
- CDerived Demand
- DLatent Demand
Show answer & explanationAnswer & explanation
Correct answer: D. Latent Demand
Latent demand refers to a desire for a good or service that consumers are unable to satisfy, often because the good or service is not yet available or they are unaware of its possibility. The council member's argument suggests an unarticulated, underlying desire that would only become apparent once the park is provided.
Why the other options are wrong
- A. Expressed demand is demand that is clearly articulated and observable, often through surveys or direct requests. (Incorrect)
- B. Induced demand occurs when an increase in supply leads to a greater demand for that good or service. (Incorrect)
- C. Derived demand is demand for a good or service that results from the demand for another, related good or service. (Incorrect)
Latent Demand
A desire for a good or service that consumers are unable to satisfy, often because the product or service is not yet available or they are unaware of its possibility.
- Unarticulated or unexpressed need.
- Becomes apparent once the solution is offered.
- Important for innovation and market creation.
Memory trick: Demand has many forms, some hidden, some obvious.