Dominick Salvatore Schaums Outline of Microeconomics, 4th edition Schaums Outline Series 2006

16 DEMAND, SUPPLY, AND EQUILIBRIUM: AN OVERVIEW [CHAP. 2
curve for a commodity is obtained by the horizontal summation of all the individuals’ demand curves for the
commodity.
EXAMPLE 5. If there are two identical individuals (1 and 2) in the market, each with a demand for commodity X given
by Qd x ¼ 8 2 P x (see Example 1), the market demand (QD x ) is obtained as indicated in Table 2.2 and Fig. 2-2.
Table 2.2
P x ($) Qd 1 Qd 2 QD x
8 0 0 0
4 4 4 8
0 8 8 16
Fig. 2-2
EXAMPLE 6. If there are 1000 identical individuals in the market, each with the demand for commodity X given by
Qd x ¼ 8–P x ceteris paribus (cet. par.), the market demand schedule and the market demand curve for commodity X
are obtained as follows (see also Table 2.3 and Fig. 2-3):
Qd x ¼ 8 P x cet: par: (individual’s d x )
QD x ¼ 1000(Qd x ) cet: par: (market D x )
Fig. 2-3
Table 2.3
P x ($) Qd x
8 0
7 1000
6 2000
5 3000
4 4000
3 5000
2 6000
1 7000
0 8000
¼ 8000 1000P x
The market demand curve for commodity X (D x ) will shift when the individual’s demand curves shift (unless the shifts
of the latter neutralize each other) and will change with time as the number of consumers in the market for X changes.