A Demand Schedule: What Is It?
A demand schedule in economics is a table that displays the quantity demanded of an item or service at various price points. On a graph where the X-axis is quantity and the Y-axis is price, a demand schedule can be represented as a continuous demand curve.
Understanding the Demand Schedule
A demand schedule is typically made up of two columns. The first column displays a product’s price in ascending or descending order. The quantity of the product desired or demanded at that price is listed in the second column. The price is determined through market research.
When the demand schedule data is graphed to create the demand curve, it provides a visual demonstration of the relationship between price and demand, allowing for easy estimation of demand for a product or service at any point along the curve.
Supply Schedules vs. Demand Schedules
A demand schedule is usually used in conjunction with a supply schedule, which shows how much of a good producers would supply to the market at various price levels. By graphing both schedules on a chart with the axes described above, one can obtain a graphical representation of a market’s supply and demand dynamics.
The quantity demanded tends to fall as the price of a good or service rises in a typical supply and demand relationship. If all other variables remain constant, the market will reach an equilibrium where the supply and demand schedules intersect. The corresponding price at this point is the equilibrium market price, and the corresponding quantity is the equilibrium quantity.
Additional Demand Factors
The price of a product is not the only factor that influences its demand. The amount of disposable income available, changes in the quality of the goods in question, effective advertising, and even weather patterns can all influence demand.
Price changes in related goods or services may also have an impact on demand. When the price of one product rises, demand for a substitute rises, and when the price of another product falls, demand for its complements rises. A price increase in one brand of coffeemaker, for example, may increase demand for a competitor’s relatively cheaper coffeemaker. If the price of all coffeemakers falls, the demand for coffee, a coffeemaker supplement, will rise.