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Effectual demand is the demand for a good, service, or commodity from people who are actually willing and able to pay for it. The relationship between supply and effectual demand determines market prices. Over time, producers will naturally raise or lower supply to meet effectual demand, which brings market prices back in line with natural prices.
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Effectual Demand Term Timeline in The Wealth of Nations
The timeline below shows where the term Effectual Demand appears in The Wealth of Nations. The colored dots and icons indicate which themes are associated with that appearance.
Book 1, Chapter 7
...commodities often fluctuates above or below the natural price. Specifically, the market price depends on effectual demand (demand from people who are willing and able to pay for the commodity) and not...
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When effectual demand for a commodity exceeds the amount of that commodity that suppliers can bring to market,...
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If the supply of a commodity exceeds effectual demand for it and its prices drop, then rent, wages, and/or profit must fall below their...
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