Individual and Market Demand

This graph shows how much an average individual demands of a good at different prices. For simplicity, we assume that this the the kind of good that consumers spend a constant fraction ( \alpha ) of their income (I) on this good.

This graph shows the overall market demand for this good if there are N consumers who on average have the demand curve shown on the left. Thus, at any price P, if the quantity demanded by each individual is (on average) q^D(P), then the total amount demanded by all N consumers is:

demand shifters

I = {{params.income}}:

\alpha = {{params.alpha | number:2}}:

N = {{params.nc}}:

q^D(P) = \frac{\alpha I}{P} = \frac{ {{ params.alpha | number:2 }} \times {{ params.income }} }{ {{ model.price | number:2}} } = {{ model.individualQuantityDemanded | number:2 }}

Q^D(P) = N \times q^D(P) = {{ params.nc }} \times {{ model.individualQuantityDemanded | number:2 }} = {{ model.marketQuantityDemanded | number:0 }}