Answer to Question #171102 in Economics for Steve McCarson

Question

to determine market demand for a product the individual demand curves for everyone in a society are added together. Using the data in the table graph the demand curve for CDs in the society of baghina

Answer 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.

Market demand curve is flatter than the individual demand curves. It happens because as price changes, proportionate change in market demand is more than proportionate change in individual demand.