The Beechmont Crest Guide to Economics
Measuring Consumer Demand with Demand Curves
- All things being equal (ceteris paribus), consumers’ willingness to buy a product increases as the price of the item falls.
- Suppose that Sony comes out with a new digital camera. The price of the camera is initially $689. If Sony discounts the camera by 20% to a price of $551.20, they will sell more of them---all other things being equal. More consumers will be willing to take the plunge at $551.20 than at $689.
-Similarly, if the price of gasoline falls from $2.41 to $1.98, all consumers of gasoline will use more of it (by driving more).
-A demand schedule shows how much of a good a consumer is willing to purchase at specific price levels. A demand curve illustrates this relationship graphically. Below are Consumer A’s demand schedule and demand curve for gasoline.
