Reviewed by Aug 27, 2020| Updated on
A demand schedule is a plotting of demand for goods and services as part of an economic analysis. The demand schedule refers to a table depicting the demand in quantity terms for goods or services at varying price levels. The plotting of a Demand schedule on a graph depicts the quantity on the X-axis and the price on the Y-axis.
Understanding Demand Schedule
- A demand schedule will generally consist of two columns. The first column will display the price for a product in increasing or decreasing order. The second column will display the quantity of the product demanded at various prices. The price is based on findings of market survey or market research for each product.
- Upon the plotting of the data in the Demand schedule on a graph, you get the demand curve. The curve depicts the relation between the price and demand at various price points. It also shows consumer behaviour at various price levels. The demand graph is a visual presentation of the data of demand and price for the goods or services. The graph helps in easily predicting the demand at a particular price or price range on the demand curve.
- A demand schedule is often studied along with the supply schedule. The supply schedule shows the quantity which a manufacturer can supply to the market at a particular price level. The plotting of both the demand schedule and the supply schedule on a graph enables understanding of the pricing patterns and the dynamics of the price and demand.
- In a normal demand and supply relationship, the quantity demanded falls with an increase in the price of the goods or services. In case all the other factors are assumed to be equal, the market should reach an equilibrium at the point where supply and demand schedules meet on the graph.
A demand schedule is useful to estimate demand at any given price point. Though there are other factors influencing demand such as disposable income, marketing and distribution arrangements, the price remains is one of the key factors. Plotting of the demand schedule along with the supply schedule helps to determine the equilibrium price point and the equilibrium quantity.