Final answer:
Latent demand occurs when a customer understands and desires a product but is unwilling or unable to spend money on it, possibly due to financial constraints or other priorities.
Step-by-step explanation:
When a customer understands the benefits of a product but does not want to spend money on it, it is an example of latent demand. Latent demand exists when there is a desire or need for a product, but the consumer is either unwilling or unable to make the purchase. This can occur due to various reasons, such as financial constraints, waiting for a price drop, or prioritizing other expenditures. It's important for businesses to recognize and address latent demand, as it represents potential future sales if the barriers preventing purchase are removed.