2 demand and supply Page 1 of 4
Demand and Supply
Demand
• The quantity demanded of a good is the amount that consumers are willing and able to
buy during a given time period at a particular price.
• The law of demand states that, all things being equal, the quantity demanded of a good
falls when the price of the good rises, and vice-versa.
• The demand curve/demand schedule shows the relationship between the quantity
demanded of a good and its price. The demand curve is a graph and the demand
schedule is a table.
• The market demand curve is the horizontal sum of the individual demand curves and
is formed by adding the quantities demanded by all the individuals at each price.
• Some of the factors that affect demand are:
• Income: A normal good is one for which demand increases as income increases;
an inferior good is one for which demand decreases as income increases.
