Economy, asked by mpaNimmjuvi, 1 year ago

Why market demand curve is flatter than individual demand curve?

Answers

Answered by kvnmurty
14
Demand curve is the price Vs  the quantity of a commodity demanded or purchased or requested from customers or vendors.     P  vs  Q   curve.
This is the curve as perceived by the producer or manufacturer.

The customer/consumer wants to buy more quantities at a time only if the price per item reduces (bargain).  Otherwise there is no advantage of buying in larger quantities.  Manufacturer also benefits from this sale or transaction as larger quantity of a commodity is disposed of into market.  Even though profit on an item of commodity is lesser, the total profit on the manufacturing and sales processes will be more for the manufacturer.

So for normal goods the demand curve slopes down vs quantity of commodity.

The market demand is the aggregation of the total demand of all consumers and customers.  The market supply is the aggregate of all manufacturers.  The total capacity of the consumers remains more or less same over a period of time.  Demand of one manufacturer increases, then it is compensated by the reduction of demand on another manufacturer goods.  So the aggregate market demand remains more or less constant.  So the market demand curve is flatter than the individual demand curve.

Answered by brainlystargirl
17
Heya...

Market demand is curve is flatter than individual demand curve because in market demand curve there are all the consumers of an economy and their all the habits and effects of consumption create change in Quantity demanded according to price while in individual demand curve only single consumer shows impact of change of price..

Thank you..
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