Definition
A demand schedule is a table that expresses the relationship between the price of a good or service and the quantity demanded by consumers at various price points within a specified period. It is typically used in microeconomics to analyze how quantity demanded changes in response to different prices, assuming all other factors remain constant (ceteris paribus).
Examples
Example 1: Individual Demand Schedule for Ice Cream
| Price (per cone) | Quantity Demanded (cones per week) |
|---|---|
| $1.00 | 10 |
| $1.50 | 7 |
| $2.00 | 5 |
| $2.50 | 3 |
| $3.00 | 2 |
Example 2: Market Demand Schedule for Ice Cream
| Price (per cone) | Quantity Demanded (cones per week) (Market) |
|---|---|
| $1.00 | 1000 |
| $1.50 | 800 |
| $2.00 | 600 |
| $2.50 | 400 |
| $3.00 | 200 |
Frequently Asked Questions (FAQs)
What is the purpose of a demand schedule?
A demand schedule serves the purpose of illustrating how much of a good or service consumers are willing to purchase at different price points. It helps economists and businesses understand consumer behavior and predict how changes in price would likely affect demand.
How is a demand schedule different from a demand curve?
Both a demand schedule and a demand curve display the relationship between price and quantity demanded. The key difference is that a demand schedule is presented in table form, while a demand curve is displayed graphically, often on a Cartesian plane, where the price is plotted on the vertical axis and the quantity demanded on the horizontal axis.
Why is the relationship between price and quantity demanded usually negative?
The relationship is typically negative due to the law of demand, which states that, all else being equal, as the price of a good or service increases, the quantity demanded decreases, and vice versa. This is because higher prices may deter consumers from purchasing as much of the good or service, while lower prices encourage higher consumption.
What factors can shift a demand schedule?
Several factors can shift the entire demand schedule, rather than merely causing movement along the curve. These factors include changes in consumer income, preferences, prices of related goods (substitutes and complements), future expectations, and the number of buyers in the market.
Can a demand schedule be used for services as well?
Yes, a demand schedule applies to both goods and services. It outlines the quantity of a service that consumers demand at various price points in the same way it does for goods.
Related Terms
Law of Demand
The law of demand states that, all else being equal, an increase in the price of a good or service will result in a decrease in the quantity demanded, and a decrease in price will lead to an increase in the quantity demanded.
Demand Curve
A graphical representation of the demand schedule that shows the relationship between the price of a good and the quantity demanded. It typically slopes downward, reflecting the inverse relationship between price and quantity demanded.
Supply Schedule
A table that shows the relationship between the price of a good and the quantity that producers are willing to supply at various prices.
Equilibrium Price
The price at which the quantity of a good or service demanded equals the quantity supplied. This is the point where the demand and supply curves intersect.
Substitutes and Complements
Substitutes are goods that can replace each other in consumption (e.g., tea and coffee), while complements are goods that are often used together (e.g., printers and ink cartridges).
Online References
Suggested Books for Further Studies
- “Principles of Economics” by N. Gregory Mankiw
- “Microeconomics” by Robert Pindyck and Daniel Rubinfeld
- “Economics in One Lesson” by Henry Hazlitt
- “Core Concepts in Economics” by Bradley Schiller
Fundamentals of Demand Schedule: Economics Basics Quiz
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