State the market demand curve, Managerial Economics

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The Market Demand Curve

Quantity of a commodity that an individual is willing to buy at a particular price of the commodity during a specific time period, given his money income, his taste as well as prices of substitutes and complements, is called individual demand for a commodity. Total quantity that all the consumers of a commodity are willing to buy at a given price per time unit, other things remaining the same, is called market demand for commodity. Or we can say that market demand for a commodity is the sum of individual demands by all consumers (or buyers) of commodity, per time unit and at a given price, other factors remaining the same. For example suppose there are three consumers (A, B, C) of a commodity X and their individual demand at different prices is of X as given in Table below.

The last column presents market demand which is the aggregate of individual demand by three consumers at different prices.

 

Price of

Commodity X

(Price per unit)

Quantity of X demanded by M

Market Demand

A

B

C

10

4

2

0

6

8

8

4

0

12

6

12

6

2

20

4

16

8

4

28

2

20

10

6

36

0

24

12

8

44

 


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