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Market Demand Schedule

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  • 0:10 Economics
  • 0:28 Demand
  • 1:16 Quantity Demanded
  • 1:48 Demand Schedule
  • 3:03 Market Demand Schedule
  • 4:20 Lesson Summary
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Lesson Transcript
Instructor: Jon Nash

Jon has taught Economics and Finance and has an MBA in Finance

Demand can often drive the cost up or down for a product or service. In this lesson, you'll discover what demand is, what it looks like, and how market demand schedules are created.

Economics

Economics is the study of how people use scarce resources in order to satisfy unlimited needs and wants. When individuals attempt to satisfy their needs and wants by purchasing a good or service, economics calls it demand. Let's talk about demand, what it looks like, and how it determines the market demand schedule.

Demand

I don't know about you, but I love bananas. Bananas can be peeled and eaten, but they can also be used to make a variety of other desserts. For example, my favorite dessert is called bananas foster. But the point is, I am willing and able to buy bananas.

My demand for bananas would change, depending on the price of the bananas in the store. When bananas cost me 30 cents each, then I buy six of them. But, at a price of 60 cents for the same bananas, I'm only willing to buy three of them.

Quantity Demanded

Quantity demanded is the quantity of a good or service that an individual is willing and able to buy at a certain price. Now I just said that if the price of a banana is 30 cents, then the quantity of bananas I demand would be six. But I'd only want three bananas if the price went up to 60 cents. So, what does this really tell us? The quantity of a product or service demanded changes as price changes.

Demand Schedule

A demand schedule is a table that lists the quantity demanded for a good that people are willing and able to buy at all possible prices. You can use it to describe the demand for a good or service in a particular area such as your hometown, or for example, in a local grocery store. That's what the demand schedule is for. For example, the demand schedule for bananas at the supermarket might look like this:

Demand Schedule for Bananas

Cost Supply
30 cents 500 bananas week
40 cents 487 bananas a week
50 cents 382 bananas a week
60 cents 240 bananas a week

The demand schedule shows you how the demand changes when you increase or decrease the price. As you can see from this demand schedule, when the price goes from 30 cents all the way up to 60 cents, the amount of bananas demanded goes down.

Now, the demand schedule works the same way for services. So, let's look at a demand schedule for Bob's lawn-cutting services in his neighborhood.

Demand Schedule for Bob's Low-rider Lawn Mowing

Cost Supply
$15 50 cuts per week
$20 47 cuts per week
$25 39 cuts per week
$30 29 cuts per week
$35 12 cuts per week
$40 1 cut per week

As you can see, this demand schedule shows the quantity demanded at each possible price for the service that Bob performs for the neighborhood.

The Market Demand Schedule

All right, let's talk about the market demand schedule. Let's go back to bananas, because I'm thinking about that banana dessert right now. There are people all over the country who want (or demand, as we say) bananas. What we want to know in economics is: how many bananas will everyone in the whole economy buy at different prices? That's where the market demand schedule comes in. What we're doing is combining all the demand schedules together, not only for the local grocery store, but all the stores everywhere in our country - wherever bananas are available for sale.

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