From a Demand Schedule to a Demand Curve
A demand schedule is a table that lists how many units a buyer (or a group of buyers) would purchase at different prices, holding other factors constant (income, tastes, prices of related goods, expectations, number of buyers). A demand curve is the graph of that same relationship: price on the vertical axis and quantity on the horizontal axis.
Example demand schedule (one consumer)
| Price per cup ($) | Quantity demanded (cups per week) |
|---|---|
| 6 | 1 |
| 5 | 2 |
| 4 | 3 |
| 3 | 5 |
| 2 | 7 |
| 1 | 10 |
Read each row as: if the price were this, the buyer would choose that quantity.
Step-by-Step Graphing Walkthrough
Step 1: Set up axes correctly
- Horizontal axis (x-axis): Quantity demanded (cups per week).
- Vertical axis (y-axis): Price (dollars per cup).
This is a common point of confusion: in many math graphs, the “independent variable” goes on the x-axis. In demand graphs, economists place price on the y-axis by convention.
Step 2: Choose a sensible scale
- Quantity scale should cover the largest quantity in the schedule (here, up to 10).
- Price scale should cover the highest price in the schedule (here, up to 6).
Step 3: Plot the points from the schedule
Plot each (Q, P) pair: (1,6), (2,5), (3,4), (5,3), (7,2), (10,1).
Step 4: Draw the demand curve
Connect the points with a smooth line (or straight segments). The curve slopes downward from left to right.
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Step 5: Label the curve and interpret one point
Label the curve D. Pick one point and translate it into words. For example, the point (5,3) means: when price is $3 per cup, quantity demanded is 5 cups per week.
Why the Demand Curve Slopes Downward (Plain-Language Intuition)
1) Diminishing willingness to pay
Most people value the first unit of something more than later units. If you love coffee, the first cup might feel “worth” a lot to you, but the 7th or 10th cup in a week is less urgent. So, to convince you to buy additional units, the price typically has to be lower.
Another way to say this: as you consume more, the extra satisfaction from one more unit tends to fall, so your willingness to pay for the next unit falls too.
2) Substitution
When a product’s price rises, people look for alternatives. If coffee gets more expensive, some buyers switch to tea, homemade coffee, or energy drinks. When the price falls, coffee becomes relatively more attractive compared with substitutes, so buyers choose more of it.
These two ideas together explain the typical downward slope: higher price → lower quantity demanded, and lower price → higher quantity demanded, holding other factors constant.
Individual Demand vs. Market Demand
Individual demand describes one consumer’s quantity demanded at each price. Market demand adds up quantities demanded across all consumers in the market at each price.
How to aggregate: add quantities horizontally
At a given price, you sum each person’s quantity demanded to get the market quantity demanded at that price.
Example: three consumers
| Price ($) | Alice Qd | Ben Qd | Chen Qd | Market Qd = A + B + C |
|---|---|---|---|---|
| 6 | 1 | 0 | 1 | 2 |
| 4 | 3 | 1 | 2 | 6 |
| 2 | 7 | 4 | 5 | 16 |
To graph the market demand curve, you would plot (Market Qd, Price) points like (2,6), (6,4), (16,2) and connect them. The market curve is not “average demand”; it is the sum of individual demands at each price.
Interpretation Practice: What Happens to Quantity Demanded When Price Changes?
When the price changes and everything else is held constant, you do not “shift demand.” You move to a different point on the same demand curve. This is called a movement along the demand curve (a change in quantity demanded).
Practice 1: Read changes from the schedule
Using the earlier schedule:
- If price falls from $5 to $3, quantity demanded rises from 2 to 5. That is an increase in quantity demanded.
- If price rises from $2 to $4, quantity demanded falls from 7 to 3. That is a decrease in quantity demanded.
Practice 2: Read changes from the graph (verbal method)
- Start at the initial price on the y-axis.
- Move horizontally to the demand curve.
- Drop down to the x-axis to read quantity demanded.
- Repeat for the new price and compare quantities.
Practice 3: Quick check questions
- Price decreases. Do you move up or down the demand curve? Down in price means you move down the y-axis and to the right on the curve (higher quantity demanded).
- Price increases. Do you move left or right? Left (lower quantity demanded).
Scenario Prompts: Identify a Movement Along the Demand Curve
In each scenario, assume nothing else changes (income, tastes, number of buyers, and prices of related goods stay the same). Your task is to say whether it is a movement along the demand curve and whether quantity demanded rises or falls.
Scenario 1: Movie tickets
A theater raises ticket prices from $10 to $14. What happens to quantity demanded, and what direction is the movement on the demand curve?
Scenario 2: Ride-share fares
Ride-share prices drop by 20% due to a temporary promotion. What happens to quantity demanded, and what direction is the movement?
Scenario 3: Bottled water at a stadium
The stadium increases the price of bottled water from $3 to $5. Identify the change: movement along the curve or shift? What happens to quantity demanded?
Scenario 4: Streaming subscription
A streaming service lowers its monthly price from $12 to $9. Is this a change in demand or a change in quantity demanded? Show the direction of movement.
Scenario 5: Coffee shop pastry
The price of a pastry increases from $2 to $3. Holding everything else constant, what happens to quantity demanded?
Checklist: “Quantity Demanded” vs. “Demand”
- Quantity demanded is a specific number: how much buyers choose at a particular price.
- A change in quantity demanded is caused by a change in the good’s own price, with other factors held constant.
- A change in quantity demanded is shown as a movement along the demand curve (from one point to another on the same curve).
- Demand refers to the entire relationship between price and quantity demanded (the whole curve).
- A change in demand means the whole curve would be different (it would shift), which happens when something other than the good’s own price changes (for example: income, tastes, number of buyers, expectations, or prices of related goods).
- Individual demand is for one consumer; market demand is the sum of all consumers’ quantities at each price.
