how to graph a demand schedule
it can be useful to graph a demand and supply schedules for a visual representation of the market for a particular product in a traditional supply and demand graph the vertical axis represents the price for a particular product and the horizontal axis represents the quantity of goods at that price using the tables for the demand schedule start by marking the quantity of goods demanded at each specific price point this curve should start in the upper left and end in the lower right when the price is high consumers demand a lower quantity of that good and vice versa this is the demand curve the reverse is true for graphing the supply curve suppliers provide a higher quantity for higher prices and a lower quantity for lower prices the point where the two curves meet is called the equilibrium point economist alfred marshall is usually credited with pioneering the supply and demand curves that are used in economics textbooks today however these graphical visualizations actually originated with french economist antoine augustin cournot in 1838 1additional factors on demandprice is not the sole factor that determines the demand for a particular product demand may also be affected by the amount of disposable income available shifts in the quality of the goods in question effective advertising and even weather patterns price changes of related goods or services may also affect demand if the price of one product rises demand for a substitute may rise while a fall in the price of a product may increase demand for its complements for example a rise in the price of one brand of coffeemaker may increase the demand for a relatively cheaper coffeemaker produced by a competitor if the price of all coffeemakers falls the demand for coffee a complement to the coffeemaker market may rise as consumers take advantage of the price decline in coffeemakers importance of a demand scheduledemand schedules play an important part in economics in projecting future economic activity and for management to predict how their product s will perform for this reason there are many different aspects of value to a demand schedule some demand schedule curves are not gradual consider a gift card for 100 if a company sells it for less than 100 demand will be substantially higher if a company sells it for more than 100 there theoretically be no financial demand for the gift card unless there are other factors to consider such as charitable donations limitations of a demand schedulethere are several downsides to a demand schedule though the law of demand is primarily focused on a good s price there are other factors that may cause changes in the demand for a product such as consumer preference product utility market innovation and global circumstances such a weather demand schedules also face the risk of obsolescence and being outdated if they are not periodically reviewed for example consider the latest iphone model and the potential demand schedule for the good upon the announcement of the next iphone model there may be immediate implications to the demand schedule of the prior version by extension the demand schedule is handcuffed to the demand curve and the demand curve does shift based on external factors last the demand schedule is simply a forecast there s no way of knowing the projections will actually materialize until a product is brought to market time passes and data can be analyzed companies would be best suited on comparing forecast demand schedules with actual demand schedules to ensure they are continually learning from prior estimates example of a demand scheduleconsider an example of a company trying to determine the best pricing strategy for its brand new 40 4k hdtv the company has performed market analysis including conducting surveys of potential consumers and has pulled together the following demand schedule from this curve the company realizes there is substantial demand for the product as the price decreases which is standard for the law of demand however the company is disappointed in how quickly the demand curve appears to have dropped off once the television is priced at greater than 1 000 it decides to do another market survey but this time is approaches two geographical markets several conclusions can be pulled from this second demand schedule first the demand curve is much less steep consumers in the second market don t dramatically have more demand for the tv as the price declines like the first market the other main takeaway is that demand is simply lower for this reason the company could leverage this information to 1 attempt to sell fewer tvs in the second market at a higher price point and 2 attempt to sell more tvs in the first market at a lower price point 