Login
Copyright

The Market Demand Curve: Definition, Equation & Examples

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Nominal GDP: Definition & Formula

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:00 Market Demand Curve Definition
  • 0:49 Equation
  • 1:26 Examples of Market…
  • 3:01 Lesson Summary
Add to Add to Add to

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Login or Sign up

Timeline
Autoplay
Autoplay
Create an account to start this course today
Try it free for 5 days!
Create An Account

Recommended Lessons and Courses for You

Lesson Transcript
Instructor: Kallie Wells
What is the market demand curve, and how is it derived? This lesson will explain the concept of a market demand curve and show you how one would go about creating the curve.

Market Demand Curve Definition

The market demand curve is the summation of all the individual demand curves in a given market. It shows the quantity demanded of the good by all individuals at varying price points. For example, at $10/latte, the quantity demanded by everyone in the market is 150 lattes per day. At $4/latte, the quantity demanded by everyone in the market is 1,000 lattes per day. The market demand curve gives the quantity demanded by everyone in the market for every price point. The market demand curve is typically graphed and downward sloping because as price increases, the quantity demanded decreases. It can also be provided as a schedule, which is in table format.

Equation

To determine the market demand curve of a given good, you have to sum all the individual demand curves for the good in the market. Here is the algebraic equation for market demand. The quantity demanded (Q) is a function of price (P), and it is summing all the individual demand curves (q), which are also a function of price. The subscripts one through n represent all the individuals in the market.

Market Demand

Examples of Market Demand Curves

To make things easy, let's assume we have two people in the market for lattes (we all know this is extremely simplified!), Jack and Jill. This table shows the individual demand schedules for lattes. The column on the far right is the summation of the individual demand curves, which becomes the market demand curve.

Market demand schedules
Market Demand Schedule

At $3 per latte, Jill would buy 24 lattes a month and Jack would buy 15. Therefore, the market demand at $3 per latte is 39 per month. You can also graph the market demand curve, which is the most common method of presenting a demand curve. This graph shows the same market demand curve as the table.

Market demand curve graph
Market Demand Curve

To unlock this lesson you must be a Study.com Member.
Create your account

Register for a free trial

Are you a student or a teacher?
I am a teacher
What is your educational goal?
 Back

Unlock Your Education

See for yourself why 10 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back

Earning College Credit

Did you know… We have over 95 college courses that prepare you to earn credit by exam that is accepted by over 2,000 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it free for 5 days!
Create An Account
Support