Market Demand Curve Lecture Notes

Overview

• Focus on transitioning from individual demand curves to market demand curves.
• Importance of understanding market demand for equilibrium analysis.

Key Concepts

• Individual Demand vs. Market Demand:
  • Individual demand curves represent the quantity demanded by single consumers.
  • Market demand curve aggregates the quantities demanded by all consumers in the market.

Example Scenario

• Assumption: Two consumers (John and Harry) for simplicity in studying demand.

Demand Schedules

• John's Demand Schedule (Column 2):
  • Shows quantity of ice cream demanded at various prices.
• Harry's Demand Schedule (Column 3):
  • Similar to John's, for Harry at various prices.

Market Demand Schedule

• Combining Demand:
  • Market demand is calculated by adding quantities demanded by John and Harry at each price point.
  • Example Values:
    • At $0: 21 cups
    • At $1: 17 cups

Graphing the Market Demand Curve

• Three curves shown in the lecture:
  1. John’s Demand Curve
  2. Harry’s Demand Curve
  3. Market Demand Curve
• Market Demand Curve:
  • Demonstrates how total market quantity demanded changes with varying prices while other factors remain constant.

Conclusion

• Understanding the market demand schedule and market demand curve is crucial for analyzing market behavior and equilibrium.