A demand schedule is a table showing the quantity demanded of a good or service at different prices over a specified period of time.
The law of demand tells us that other things being equal, the price and quantity demanded of a good or service are inversely related, so as the price of a good increases, the quantity demanded decreases and vice versa. What the law of demand does not tell us is how much the quantity demanded will change following a change in its price. A demand schedule answers this question by showing exactly how many of a specific good or service will be purchased at different prices. For example, Mr. and Mrs. Smith have a seven-year-old daughter. The couple enjoys going to the theater for “date nights.” On those nights, they hire Jane to babysit. The table below is Mr. and Mrs. Smith’s demand schedule for babysitting. It lists the number of hours per month that they are willing to hire Jane at different hourly rates. For example, Mr. and Mrs. Smith are willing to pay Jane to babysit for 55 hours per month at a rate of $4 per hour, but only 17 hours per month at a rate of $12 per hour. The Smith family is one buyer, so economists consider their demand schedule an individual demand schedule. An individual demand is the amount of a good or service an individual (or single buyer) is willing to purchase with his or her limited income at the prevailing set of relative prices.
A demand schedule is used to plot a demand curve. Economists put the price on the vertical axis and the quantity demanded on the horizontal axis. The Smith's demand schedule for babysitting has been used to plot their demand curve below.
Create your own demand schedule. For example, how many soft drinks would you purchase at $0.25 a can in a month? How many soft drinks would you purchase at $1.25 a can? You can create your individual demand schedule for any good or service by making a table of how many of a given item you would purchase at different prices. You can graph your individual demand curve by plotting the data points putting the price per can on the vertical axis and the quantity demanded on the horizontal axis.
Demand – The Consumer's Perspective
Supply and Demand – Producers and Consumers Reach Agreement
Changes in Demand – When Consumer Tastes Change
Price Elasticity of Demand – How Consumers Respond to Price Changes
