Draw market demand and market supply by adding individual curves across at each price
6 min
4 questions
Key terms
Market demand
Market demand is the total quantity of a good that all the buyers in a market are willing and able to buy at each price.
Individual demand
Individual demand is the quantity of a good that one buyer is willing and able to buy at each price.
Adding two buyers' demand curves
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Two buyersAt price P1, buyer A wants qA on dA and buyer B wants qB on dB.
At price P1, buyer A wants qA and buyer B wants qB, so market demand D lies to the right, at Q1, their sum.
Market demand adds quantities, not prices. At each price, read across to every buyer's curve and add what each would buy there.
Doing that at every price and joining the totals gives the market demand curve: the horizontal sum of the individual demand curves.
With made-up figures: at £4 buyer A wants two units and buyer B four, so the market quantity demanded at £4 is six. At £6 they want one and two, so three.
A market with more buyers adds more curves to the sum, which is why a rise in the size of the population shifts market demand to the right.