Individual And Market Demand
Economics notes
Individual And Market Demand
Price and Quantity
➡️ Demand is the quantity of a good or service that consumers are willing and able to purchase at a given price. It is a function of individual preferences, income, and prices of related goods.
➡️ Market demand is the sum of individual demands for a good or service. It is determined by the interaction of buyers and sellers in the market.
➡️ Price and quantity are determined by the intersection of the demand and supply curves. The equilibrium price is the price at which the quantity demanded is equal to the quantity supplied. The equilibrium quantity is the quantity at which the demand and supply curves intersect.
What is the difference between individual demand and market demand?
Individual demand refers to the quantity of a good or service that a single consumer is willing and able to purchase at a given price. Market demand, on the other hand, refers to the total quantity of a good or service that all consumers in a particular market are willing and able to purchase at a given price.
How does a change in income affect individual and market demand?
An increase in income generally leads to an increase in both individual and market demand for most goods and services. This is because consumers have more disposable income to spend on these goods and services. Conversely, a decrease in income generally leads to a decrease in both individual and market demand.
What factors can cause a shift in market demand?
Several factors can cause a shift in market demand, including changes in consumer preferences, changes in income levels, changes in the prices of related goods or services, changes in population size or demographics, and changes in government policies or regulations. These shifts can either increase or decrease the overall demand for a particular good or service in the market.