The Demand Schedule of a particular commodity shows the price-output relationship. Demand Schedule is a tabular representation showing different prices and the corresponding quantities of a particular product that would be sold at those prices. Table 3.1 is a hypothetical demand schedule. It shows that if the price per pair of a particular model of shoes is Rs.200, 400 pairs would be demanded at that price.
When the price increases to Rs.300 per pair, the demand will come down to 200 pairs of shoes. Again, if the price drops to Rs.100 per pair, total demand of the same product rises to 600 pairs. It is assumed here that all other conditions that might affect the demand do not change or remain constant.
Hypothetical Demand Schedule:
Price/pair of Shoes (Rs.) | No. of pairs demanded |
100 | 600 |
200 | 400 |
300 | 200 |
Demand Curve:
The geometric representation of the demand schedule is called the demand curve. On the basis of the above hypothetical Demand Schedule, we can draw the demand curve. In the horizontal axis we measure quantity demanded and price per unit of the product is measured along the vertical axis. Hence, any point in this quadrant shows a particular price-quantity combination.
For example, point A on the demand curve (figure 3.1) shows the demand for 200 pairs of shoes at Rs.300 per pair, point B shows the demand for shoes is 400 pairs when the price per pair is Rs.200 and point C depicts a situation where 600 pairs are demanded at Rs.100 for each pair of shoes.
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If points A, B and C are joined we get the demand curve. Demand schedule represents a Few specific price-output combinations whereas the demand curve as a whole shows all possible combinations.
In figure 3.1 we observe that the demand curve slopes downward from left to right. This happens under normal circumstances because the demand for a product usually increases as the price of it falls, and vice- versa.