Derivation Of an Individual Demand CurveDerivation Of an Individual Demand Curve

Individual demand schedule is a table which shows the different quantities of comedy demanded at different prices.

Derivation Of an Individual Demand Curve

The demand for a commodity made by an individual consumer is called individual demand. In other words, an individual demand refers to the quantities of a commodity demanded by an individual consumer at various prices, other things remaining the same. As stated by the law of demand, the quantity demanded by an individual increases with the fall in price and vice versa.

Also Check: What is Demand? Function,Difference between Desire and Demand.


An individual demand curve for a commodity can be derived by the help of individual demand schedule as explained below:

Individual Demand Schedule


An individual demand schedule is a table that shows different quantities of a commodity demanded at different prices. A hypothetical demand schedule is shown in the table 1.2.

Price of Good (in Rs.)Quantity Demanded (In Units)
510
420
330
240
150
Table of Individual Demand Schedule

Also Check: 8 Disadvantages of Market Economy

The table shows that the quantity demanded is 10 units at the Price Rs.5 per unit.when the price of the good fails to Rs 4,The quantity Demanded increase to 20 units. Similarly,as the price gradually fails to re.1,the quantity Demanded by an individual consumer gradually increase to 50 units .From the schedule,it is clear that as the price fails,the quantity demanded by an individual increases and vice versa.

Also Check : 7 Advantages of Market Economy

Individual Demand Curve

Individual demand curve is the curve that represents different quantities of a commodity demanded by an individual consumer at different Prices.It is the graphical representation of an individual demand schedule .The Derivation of individual Demand Curve is show in the figure.12.


In the Figure ,1.2 The individual Demand Curve by plotting 10 units of the commodity at price Rs,5.we get Points 20 Units of the commodity at price Rs.4 we get Points B.Similarly, Points- C,D And E Are Obtained .

By Joining These Points ,we Get a Curve DD, Which is Known as Individual Demand Curve. It Slope downward to the right,it has negative slopes. the negative slope of the demand curve DD shows the inverse relationship between the price and quantity demanded for a commodity.

Also Check: 8 Disadvantages of Market Economy

Derivation of the Market Demand Curve

A market demand is the total of quantities of a commodity demanded by all the consumers in the market at different prices in the given period of the time. In every market ,There may be several consumer of a commodity.

Suppose, there are only two buyers in the market for a commodity. By aggregating or summing up their individual demand, market demand is obtained. It can be derived by the help of market demand schedule as follows:

Market Demand Schedule

Market demand schedule is the table that shows total demand of all the consumers in the market at various prices of the commodity. It can be obtained by the summation of individual demand schedules.

Price Per Unit
(in Rs.)
A’s demand
(in Units)
B’s Demand
(In units)
Market Demand
(in Units)
55105+10=15
4102010+20=30
3153015+30=45
2204020+40=60
1255025+50=75
Table of Market Demand Schedule

The table 1.3 shows that when price of the commodity rises, its market demand decreases. For example, when per unit price of the commodity is Rs. 5, A’s demand is 5 units and B’s demand is 10 units. Thus, the total market demand at Rs. 5 is 15 units. But when price falls to Rs.4 per unit, then market demand increases to 30 units and so on.

Market Demand Curve

Market demand curve represents the total quantities of a commodity demanded by all the consumers in the market at different prices. It is the horizontal summation of the individual demand curves. This curve is derived from the market demand schedule as shown in the figure 1.3.

In the figure 1.3, demand curve has been drawn on the basis of table 1.3. X-axis and Y-axis represents the quantity and price respectively. In the fig. 1.3, demand curve of the consumer ‘A’ is represented by DADA and demand curve of the consumer ‘B’ is represented by DBDB. The market demand curve has been derived from the horizontal summation of individual demand curves.

When price is Re. 1 per unit, A’s demand is 25 units and B’s demand is 50 units. The horizontal summation of individual demand of both the consumers’ give market demand i.e., 75 units.Thus,by adding the different points on individual demand curves, we get the Market Demand Curve DD as shown in Figure.

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