The individual and market demand curves, Managerial Economics

The individual and market demand curves

The quantities and prices in the demand schedule can be plotted on a graph. Such a graph after the individual demand schedule is called The Individual Demand Curve and is downward sloping.

An individual demand curve is the graph relating prices to quantities demanded at those prices by an individual consumer of a given commodity

The curve can also be drawn for the entire market demand and is called a Market Demand Curve:

1060_market Demand Curve.png

A market demand curve is the horizontal summation of the individual demand curves i.e. by taking the sum of the quantities consumed by individual consumers at each price.

Consider a market consisting of two consumers:

2404_market Demand Curve1.png

At price P1 fig. 2:2 above, consumer 1 demands q1, consumer II demands quantity q2, and total market demand at that price is (q1+q2). At price p2, consumer 1 demands q'1, and consumer II demands quantity q'2 and total market demand at that price is (q'1+q'2). DD is the total market demand curve.

Posted Date: 11/27/2012 4:57:31 AM | Location : United States







Related Discussions:- The individual and market demand curves, Assignment Help, Ask Question on The individual and market demand curves, Get Answer, Expert's Help, The individual and market demand curves Discussions

Write discussion on The individual and market demand curves
Your posts are moderated
Related Questions
State the Traditional demand theory So an over-simplified and the most commonly stated demand function is: Dx = f (PX) thatconnotes that demand for commodity X is the function

Question 1: (a) How do economists go about studying the economics of the public sector? Describe the four stages of analysis. (b) What are the main reasons explaining syst

State the difficulties in the measurement of profit.

Q. Illustrate about Pecuniary economies? Pecuniary economies (which is monetary economies) are those economies accrued by the firm from paying lower prices for the factors used

how to solve problems using derivatives ?

FACTORS RESPONSIBLE FOR WAGE DIFFERENTIALS BETWEEN OCCUPATIONS The major cause is demand and supply for the particular labour concerned, but other causes could be: i.

who are the contributors in economics and what they contribute in economics

Q. Show the Properties of isoquants? Isoquants slope downwards to the right:   It means that, in order to keep output constant; when amount of one factor is increased then the


Interaction of supply and demand, equilibrium price and quantity In perfectly competitive markets the market price is determined by the interaction of the forces of demand and