Overview

Consumers are able and willing to buy commodities (goods and services) that will satisfy their needs and wants. Quantity demanded is the quantity a consumer is willing (has the desire to) and able (has the means to) buy of a particular product at a particular price. Under Ceteris Paribus (all other factors stay the same) the law of demand states that as price increases, quantity demanded by a consumer will decrease. Market demand is the quantity all individual consumers in a market are willing and able to buy at a particular price added together. It is the quantity the entire market will buy of a particular good or service at a particular point in time.

Just like consumers have an ability and willingness that leads them to demand goods and services, producers have an ability and willingness that leads them to have supply goods and services. Quantity supplied is the quantity a producer is able and willing to sell of a particular product at a particular price. Under Ceteris Paribus (all other factors stay the same) the law of supply states that as price increases, quantity supplied by a producer will also increase. Market supply is the quantity all individual producers in a market are willing and able to buy at a particular price added together. It is the quantity the entire market will supply of a particular good or service at a particular point in time.

Schedules and Curves

• A demand schedule is a table showing the quantity an individual consumer or a market is willing and able to buy of a particular good or service at various prices. Demand schedules need a title at the top, a price column on the left giving different values in a consistent currency or unit in order from lowest or highest and a quantity column to the right given in an appropriate unit.


• A supply schedule is the same, but the quantity column refers to the quantity an individual producer or a market is willing and able to sell of a particular good or service.


• A demand curve is when the demand schedule data is graphed on axes. Price is drawn on the vertical axis and quantity demanded is drawn on the horizontal axis. The curve is labelled D and if any movements of the entire curve occur, the new curve is named D₂, the next is called D₃, and so on. Demand curves usually slope downwards, like "\".


• A supply curve is the same, but the horizontal axis is quantity supplied rather than quantity demanded. Supply curves usually slope upwards, like "/".


• Both the demand and supply curves can be also be placed on the same axis. The point where both curves intersect is the equilibrium price and quantity.