What is a table showing the quantity of a good or service that buyers are willing to purchase at each possible price?

What Is a Demand Schedule?

In economics, a demand schedule is a table that shows the quantity demanded of a good or service at different price levels. A demand schedule can be graphed as a continuous demand curve on a chart where the Y-axis represents price and the X-axis represents quantity.

Demand Schedule

Understanding Demand Schedule

A demand schedule most commonly consists of two columns. The first column lists a price for a product in ascending or descending order. The second column lists the quantity of the product desired or demanded at that price. The price is determined based on research of the market.

When the data in the demand schedule is graphed to create the demand curve, it supplies a visual demonstration of the relationship between price and demand, allowing easy estimation of the demand for a product or service at any point along the curve.

A demand schedule tabulates the quantity of goods that consumers will purchase at given prices.

Demand Schedules vs. Supply Schedules

A demand schedule is typically used in conjunction with a supply schedule, which shows the quantity of a good that would be supplied to the market by producers at given price levels. By graphing both schedules on a chart with the axes described above, it is possible to obtain a graphical representation of the supply and demand dynamics of a particular market.

In a typical supply and demand relationship, as the price of a good or service rises, the quantity demanded tends to fall. If all other factors are equal, the market reaches an equilibrium where the supply and demand schedules intersect. At this point, the corresponding price is the equilibrium market price, and the corresponding quantity is the equilibrium quantity exchanged in the market.

Key Takeaways

• Analysts can estimate the demand for a good at any point along the demand schedule.
• Demand schedules, used in conjunction with supply schedules, provide a visual depiction of the supply and demand dynamics of a market.

Additional Factors on Demand

Price is not the sole factor that determines the demand for a particular product. Demand may also be affected by the amount of disposable income available, shifts in the quality of the goods in question, effective advertising, and even weather patterns.

Price changes of related goods or services may also affect demand. If the price of one product rises, demand for a substitute may rise, while a fall in the price of a product may increase demand for its complements. For example, a rise in the price of one brand of coffeemaker may increase the demand for a relatively cheaper coffeemaker produced by a competitor. If the price of all coffeemakers falls, the demand for coffee, a complement to the coffeemaker market, may rise as consumers take advantage of the price decline in coffeemakers.

What Is Quantity Demanded?

Quantity demanded is a term used in economics to describe the total amount of a good or service that consumers demand over a given interval of time. It depends on the price of a good or service in a marketplace, regardless of whether that market is in equilibrium.

The relationship between the quantity demanded and the price is known as the demand curve, or simply the demand. The degree to which the quantity demanded changes with respect to price is called the elasticity of demand.

Key Takeaways

• In economics, quantity demanded refers to the total amount of a good or service that consumers demand over a given period of time.
• Quantity demanded depends on the price of a good or service in a marketplace.
• The price of a product and the quantity demand for that product have an inverse relationship, according to the law of demand.

Quantity Demanded

Understanding Quantity Demanded

Inverse Relationship of Price and Demand

The price of a good or service in a marketplace determines the quantity that consumers demand. Assuming that non-price factors are removed from the equation, a higher price results in a lower quantity demanded and a lower price results in higher quantity demanded. Thus, the price of a product and the quantity demanded for that product have an inverse relationship, as stated in the law of demand.

An inverse relationship means that higher prices result in lower quantity demand and lower prices result in higher quantity demand.

Change in Quantity Demanded

A change in quantity demanded refers to a change in the specific quantity of a product that buyers are willing and able to buy. This change in quantity demanded is caused by a change in the price.

Increase in Quantity Demanded

An increase in quantity demanded is caused by a decrease in the price of the product (and vice versa). A demand curve illustrates the quantity demanded and any price offered on the market. A change in quantity demanded is represented as a movement along a demand curve. The proportion that quantity demanded changes relative to a change in price is known as the elasticity of demand and is related to the slope of the demand curve.

An Example of Quantity Demanded

Say, for example, at the price of $5 per hot dog, consumers buy two hot dogs per day; the quantity demanded is two. If vendors decide to increase the price of a hot dog to $6, then consumers only purchase one hot dog per day. On a graph, the quantity demanded moves leftward from two to one when the price rises from $5 to $6. If, however, the price of a hot dog decreases to $4, then customers want to consume three hot dogs: the quantity demanded moves rightward from two to three when the price falls from $5 to $4. 

By graphing these combinations of price and quantity demanded, we can construct a demand curve connecting the three points.

Using a standard demand curve, each combination of price and quantity demanded is depicted as a point on the downward sloping line, with the price of hot dogs on the y-axis and the quantity of hot dogs on the x-axis. This means that as price decreases, the quantity demanded increases. Any change or movement to quantity demanded is involved as a movement of the point along the demand curve and not a shift in the demand curve itself. As long as consumers' preferences and other factors don't change, the demand curve effectively remains static.

Price changes change the quantity demanded; changes in consumer preferences change the demand curve. If, for example, environmentally conscious consumers switch from gas cars to electric cars, the demand curve for traditional cars would inherently shift.

Price Elasticity of Demand

The proportion to which the quantity demanded changes with respect to price is called elasticity of demand. A good or service that is highly elastic means the quantity demanded varies widely at different price points.

Conversely, a good or service that is inelastic is one with a quantity demanded that remains relatively static at varying price points. An example of an inelastic good is insulin. Regardless of price point, those who need insulin demand it at the same amount.

Is the amount of a good or service that consumers are willing and able to purchase at a certain price?

What do you call the table that shows the price of a good and the quantity demanded for that good at a given price within a given period?

What is a table showing the relationship between the price of a good and the amount that buyers are willing and able to purchase at various prices?

Is a table that lists the quantity of a good that a person will purchase at each price in a market?