Definition
A demand schedule is a table that lists how many units of a good or service consumers would buy at different prices. It shows the relationship between price (vertical axis when graphed) and quantity demanded (horizontal axis when graphed). Turning the table into a line or curve produces the familiar downward‑sloping demand curve used in basic microeconomics.
Core components
– Typical format: two columns — Price and Quantity Demanded.
– Price entries are ordered (ascending or descending).
– Quantity entries show the amount consumers would buy at each listed price.
Why it matters
– Visualizing the schedule as a curve helps estimate how quantity demanded changes when price moves.
– When you plot a supply schedule on the same axes, the intersection gives the market equilibrium price and quantity (where supply equals demand).
– Firms and analysts use demand schedules to test pricing options and to forecast likely sales at different prices.
Two common forms
1. Tabular demand schedule — the table of price → quantity pairs.
2. Graphical demand curve — the continuous curve derived from the table (price on the Y‑axis, quantity on the X‑axis).
How to build and graph a demand schedule (step‑by‑step)
1. Choose the good and define the market (time period, region, consumer group).
2. Collect price points to test (e.g., $100, $200, $300).
3. Estimate quantity demanded at each price (via surveys, historical data, experiments, or market research).
4. Make a two‑column table: Price | Quantity Demanded.
5. On a chart put Price on the vertical (Y) axis and Quantity on the horizontal (X) axis.
6. Plot each (Price, Quantity) pair and connect the points smoothly to form the demand curve (typically downward‑sloping).
7. If you have a supply schedule, plot it too; the crossing point is the market equilibrium.
Checklist: quick quality control before using a demand schedule
– Have you defined the market and time horizon clearly?
– Are price points realistic and spaced usefully?
– Are the demand estimates based on current data or recent market tests?
– Did you note non‑price assumptions (income, tastes, prices of related goods)?
– Will you update the schedule if conditions change? (schedules go out of date)
Factors that shift demand (beyond price)
– Consumer income (more income usually raises demand for normal goods).
– Tastes and preferences (advertising, trends).
– Prices of related goods: substitutes (price rise in A can increase demand for B) and complements (price fall in A can increase demand for complement B).
– Expectations about future prices or income.
– External events (weather, regulation, product innovation).
Limitations and cautions
– The schedule is a forecast, not a guarantee. Real sales can differ.
– It assumes ceteris paribus — “all else equal.” If income or preferences change, the demand schedule shifts.
– Some goods have discontinuous demand patterns (e.g., gift cards sold below face value may see very different behavior).
– Schedules that are not updated can quickly become obsolete (product announcements, new models, or market shocks can change demand).
– Simple schedules ignore distributional, behavioral, and strategic considerations (e.g., price discrimination, inventory limits).
Worked numeric example (small, illustrative)
Suppose a firm estimates this demand schedule for a new TV:
Demand schedule (table)
– Price $500 → Quantity demanded 100
– Price $400 → Quantity demanded 200
– Price $300 → Quantity demanded 400
– Price $200 → Quantity demanded 600
– Price $100 → Quantity demanded 800
A competitor’s supply schedule for the same market:
– Price $500 → Quantity supplied 900
– Price $400 → Quantity
400 → Quantity supplied 700
300 → Quantity supplied 400
200 → Quantity supplied 200
100 → Quantity supplied 50
Market interpretation (using these schedules)
– At $500: quantity demanded = 100, quantity supplied = 900 → excess supply = 800 (surplus). Downward pressure on price.
– At $400: demand 200, supply 700 → excess supply = 500. Price tends to fall.
– At $300: demand 400, supply 400 → no excess; this is the simple market equilibrium (price = $300, quantity = 400) in this illustrative table.
– At $200: demand 600, supply 200 → excess demand = 400 (shortage). Upward pressure on price.
– At $100: demand 800, supply 50 → excess demand = 750. Strong upward pressure.
How the schedule explains price movement
– If price starts above $300, surplus exists and sellers will generally cut price (or accumulate unsold
inventory), driving price down toward equilibrium. Conversely, if price starts below $300, quantity demanded exceeds quantity supplied (a shortage), so buyers compete for scarce goods and sellers can raise price until the shortage is eliminated and the market returns to equilibrium.
Movement along the schedule vs. a shift of the schedule
– Movement along the demand schedule (or demand curve) — also called a change in quantity demanded — happens when price changes and all other factors remain constant (ceteris paribus). Example: moving from price = $400 (quantity demanded = 200) to price = $300 (quantity demanded = 400) is a movement along the schedule caused by a price fall.
– A shift of the demand schedule — called a change in demand — occurs when some non-price factor changes so that quantity demanded alters at every price. The entire schedule (or curve) moves right (increase in demand) or left (decrease in demand).
Common determinants that shift demand (non-price factors)
Checklist — these shift the whole demand schedule:
1. Income of buyers (normal vs. inferior goods).
2. Tastes and preferences.
3. Prices of related goods: substitutes and complements.
4. Expectations about future price or income.
5. Number of buyers (market size).
6. Government policies (taxes, subsidies) and regulations.
Worked numeric example — how a demand shift changes equilibrium
Assumptions: use the same supply schedule implied earlier (price → quantity supplied): $500→900, $400→700, $300→400, $200→200, $100→50. Original demand schedule (price → quantity demanded): $500→100, $400→200, $300→400, $200→600, $100→800. Original equilibrium from the table: price = $300, quantity = 400.
Suppose buyers’ incomes rise and demand increases by 100 units at every price. New demand schedule: $500→200, $400→300, $300→500, $200→700, $100→900. To find the new equilibrium more precisely between $300 and $400, approximate linear demand and supply between those two prices:
1. Fit linear demand between P = 300 (Qd = 500) and P = 400 (Qd = 300).
– Slope (b) = (300 − 500
− 500) / (400 − 300) = −200 / 100 = −2 units per $1.
2. Demand line (between $300 and $400). Use the point-slope form Qd = a + bP with b = −2. Plug P = 300, Qd = 500 to solve for a:
500 = a + (−2)(300) → 500 = a − 600 → a = 1,100.
So approximate linear demand in this interval: Qd(P) = 1,100 − 2P.
3. Fit linear supply between P = 300 (Qs = 400) and P = 400 (Qs = 700).
– Slope (d) = (700 − 400) / (400 − 300) = 300 / 100 = 3 units per $1.
– Use Qs = c + dP. Plug P = 300, Qs = 400:
400 = c + 3(300) → 400 = c + 900 → c = −500.
– So approximate linear supply in this interval: Qs(P) = −500 + 3P.
4. Solve for the new equilibrium (set Qd = Qs):
1,100 − 2P = −500 + 3P
1,100 + 500 = 3P + 2P
1,600 = 5P
P* = 1,600 / 5 = $320.
Plug back to find Q*:
Q* = 1,100 − 2(320) = 1,100 − 640 = 460 units.
(Check: Qs = −500 + 3(320) = −500 + 960 = 460.)
Results and interpretation
– New equilibrium price ≈ $320 (up from $300).
– New equilibrium quantity ≈ 460 units (up from 400).
– Intuition: a parallel rightward shift in demand (±100 units at every price) raises both equilibrium price and quantity. Because supply is relatively steeper (slope 3) than demand here (slope −2) in this interval, the quantity response is proportionally larger than the price response.
Percent changes (for quick context)
– Price change: (320 − 300) / 300 = 20 / 300 = 6.67%.
– Quantity change: (460 − 400) / 400 = 60 / 400 = 15%.
Checklist for doing the same calculation
– Confirm the original discrete schedules (price → quantity) and identify the interval that contains the new equilibrium.
– Linearly interpolate supply and demand between the two relevant price points:
1) Compute slope = ΔQ / ΔP.
2) Solve for the intercept using one known (P,Q) point.
3) Write Q(P) for supply and demand.
– Set Qd(P) = Qs(P) and solve for P*.
– Compute Q* by substituting P* into either Qd(P) or Qs(P).
– Perform a sanity check (numbers consistent, lies within chosen interval).
– Note assumptions and limitations.
Key assumptions and caveats
– We approximated both curves as linear between the two grid prices. Real demand/supply curves can be nonlinear; interpolation is an approximation.
– The shift was a parallel (horizontal) increase of 100 units at every price—this is a simplifying assumption that may not hold for real income effects.
– No supply-side response other than movement along the original supply curve
– No price controls, taxes, or rationing were imposed; markets clear by price adjustment.
– No inventory accumulation or multi-period dynamics (this is a static, single-period comparison).
– No entry/exit of firms between the two grid prices; supply curve parameters are fixed.
– Grid prices used to estimate slopes are assumed representative of the local linear approximation.
Worked numerical example
Example (continued)
Assume the following two-point grids used to estimate linear curves (these are illustrative numbers):
– Demand grid points: at price P = $10, quantity demanded Qd = 500; at P = $30, Qd = 100.
– Supply grid points: at price P = $10, quantity supplied Qs = 200; at P = $30, Qs = 400.
– The demand curve shifts right by 100 units at every price (a horizontal parallel shift).
– Supply curve does not change.
Step-by-step algebra (linear approximation)
1. Estimate slopes (change in Q per $1 change in P)
– Demand slope bd = (Qd2 − Qd1) / (P2 − P1) = (100 − 500) / (30 − 10) = −400 / 20 = −20 units per $1.
– Supply slope bs = (Qs2 − Qs1) / (P2 − P1) = (400 − 200) / (30 − 10) = 200 / 20 = 10 units per $1.
2. Write linear functions in intercept form Q = A + bP
– Use demand point (P=10, Q=500):
500 = A_d + (−20)·10 ⇒ A_d = 500 + 200 = 700.
So Qd(P) = 700 − 20·P.
– Use supply point (P=10, Q=200):
200 = A_s + 10·10 ⇒ A_s = 200 − 100 = 100.
So Qs(P) = 100 + 10·P.
3. Solve for the original equilibrium (set Qd = Qs)
– 700 − 20P = 100 + 10P
– 700 − 100 = 30P ⇒ 600 = 30P ⇒ P* = $20.
– Equilibrium quantity Q* = Qs(20) = 100 + 10·20 = 300 units.
4. Apply the parallel rightward shift of demand (+100 units at every price)
– Shifted demand: Qd'(P) = (700 + 100) − 20·P = 800 − 20·P.
5. Solve for the new equilibrium
– 800 − 20P = 100 + 10P
– 800 − 100 = 30P ⇒ 700 = 30P ⇒ P’ = 700/30 ≈ $23.333…
– New quantity Q’ = Qs(23.333…) = 100 + 10·23.333… ≈ 333.333… units.
Results (numeric)
– Price increases from $20.00 to $23.33, a change of +$3.33 (≈ +16.67%).
– Quantity increases from 300 to ≈333.33 units, a change of ≈+33.33 units (≈ +11.11%).
Interpretation and checks
– The price rises because the demand shift increases excess demand at the original price; supply is fixed so the market clears at a higher price.
– The quantity rises because both higher demand and higher price lead to greater quantity supplied along the fixed supply curve.
– Check signs and units: demand slope is negative (higher P → lower Qd); supply slope is positive.
Optional: compute point price elasticity of demand at the original equilibrium
– Price elasticity of demand ε = (dQ/dP) · (P/Q) ≈ (−20) · (20/300) = −400/300 = −1.333.
– Interpretation: demand is elastic (|ε| > 1) at the original equilibrium; the parallel shift produced a larger percent change in quantity than in price relative to the initial levels in this linear approximation.
Quick checklist to replicate this procedure with your own grid data
– Record two representative (P, Qd) grid points and two representative (P, Qs) grid points.
– Compute slopes bd and bs = ΔQ/ΔP.
– Solve for intercepts to write Qd(P) and Qs(P).
– Solve Qd = Qs for the original equilibrium.
– Apply any horizontal (quantity) shifts to Qd(P) or Qs(P) as specified.
– Resolve equilibrium; compute changes and percent changes.
– Note assumptions and verify whether a linear approximation is reasonable over the price range.
Important assumptions and caveats (summary)
– Linear interpolation between two grid prices approximates local curvature; real curves may be nonlinear.
– A parallel horizontal shift means the entire demand schedule moves by the same quantity at every price—this assumes no differential income or substitution effects across prices.
– No supply-side structural change,