A demand schedule is a table that shows the quantity of a good or service that a consumer is willing and able to purchase at various prices. It is a representation of the relationship between the price of a good or service and the quantity of it that consumers are willing to purchase. A demand curve is a graphical representation of a demand schedule, with price on the y-axis and quantity on the x-axis.
An example of a demand schedule and curve is the demand for gasoline. Let's say that the current price of gasoline is $3.00 per gallon. The demand schedule for gasoline might look like this:
| Quantity of Gasoline (in gallons) | Price per gallon ($) |
|---|---|
| 0 | $3.00 |
| 10 | $3.00 |
| 20 | $3.00 |
| 30 | $3.00 |
| 40 | $3.00 |
| 50 | $3.00 |
This demand schedule shows that at a price of $3.00 per gallon, a consumer is willing to purchase anywhere from 0 to 50 gallons of gasoline.
If we graph this demand schedule, we get a demand curve. The demand curve for gasoline at a price of $3.00 per gallon would look like this:
[Insert graph of demand curve]
As the price of gasoline decreases, the quantity of gasoline demanded by consumers will increase. For example, if the price of gasoline were to decrease to $2.50 per gallon, the demand schedule and curve would look like this:
| Quantity of Gasoline (in gallons) | Price per gallon ($) |
|---|---|
| 0 | $2.50 |
| 10 | $2.50 |
| 20 | $2.50 |
| 30 | $2.50 |
| 40 | $2.50 |
| 50 | $2.50 |
[Insert graph of demand curve]
As the price decreases, the quantity of gasoline demanded increases. This relationship between price and quantity demanded is known as the law of demand. It states that, all other things being equal, as the price of a good or service decreases, the quantity of it demanded by consumers will increase, and vice versa.
In summary, a demand schedule is a table that shows the quantity of a good or service that a consumer is willing and able to purchase at various prices. A demand curve is a graphical representation of a demand schedule, showing the relationship between price and quantity demanded. The law of demand states that, all other things being equal, as the price of a good or service decreases, the quantity of it demanded by consumers will increase, and vice versa.
