ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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determining the price each consumer is willing to pay for the good & summing those prices across all consumers
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observing the prices and quantities sold in a market over time and plotting those price-quantity combinations in a graph
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summing the quantities every consumer is willing to buy at each different price
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observing the behavior of an individual consumer in a market
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Detailed explanation-1: -The market demand curve is obtained by adding together the demand curves of the individual households in an economy. As the price increases, household demand decreases, so market demand is downward sloping. The market supply curve is obtained by adding together the individual supply curves of all firms in an economy.
Detailed explanation-2: -The market demand curve is a graph that shows the relationship between the price of a product and the demand for that particular product. The price is typically shown on the Y axis of the graph while the demand is shown on the X axis.
Detailed explanation-3: -The market demand function represents the total quantity of a good demanded by all individuals at each price. It is derived by summing up horizontally the demand curve of each consumer. For each price, the quantity demanded by each consumer is added up horizontally to derive the total quantity demanded in the market.
Detailed explanation-4: -The market demand for a good describes the quantity demanded at every given price for the entire market. Remember that the entire market is made up of individual buyers with their own demand curves. This means that the market demand is the sum of all of the individual buyer’s demand curve.