diffrenciate individual demand curve and market demand curve
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Answer:
Theory Of Consumer Behaviour. Distinguish between individual demand curve and market demand curve. An individual demand curve shows different quantities of a commodity demanded at different prices within a given period by an individual household.Market demand curve is always a downward sloping curve to the right.
Individual Demand Example
The individual demand is the demand of one individual or firm. It represents the quantity of a good that a single consumer would buy at a specific price point at a specific point in time. While the term is somewhat vague, individual demand can be represented by the point of view of one person, a single family, or a single household.
Individual demand depends on the individual’s desires and the quantities of products he or she is able to afford at a specific price point, reports Quickonomics. It assume two things: first that a person would rather have more than less and, secondly, that his likes or preferences are constant over time.
Market Demand Example
Market demand provides the total quantity demanded by all consumers. In other words, it represents the aggregate of all individual demands. There are two basic types of market demand: primary and selective. Primary demand is the total demand for all of the brands that represent a given product or service, such as all phones or all high-end watches. Selective demand is the demand for one particular brand of product or service, such as the iPhone or a Michele watch.
Market demand is an important economic marker because it reflects the competitiveness of a marketplace, a consumer’s willingness to buy certain products and the ability of a company to leverage itself in a competitive landscape. If market demand is low, it signals to a company that they should terminate a product or service, or restructure it so that it is more appealing to consumers, reports Corporate Finance Institute.