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 EXAM FOCUS POINT 
Sketching demand and/or supply curves may be a useful way of analysing an exam question. 
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CHAPTER 4
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MICROECONOMIC FACTORS 
 
93 
QUESTION 
Demand curve
 
Refer to Figure 2. The price of the commodity is currently $3 per kilo, and demand is approximately 4 
kilograms at that price. What would be the (approximate) demand for the commodity if the price fell to 
$2 per kilo? And what would be the demand if the price rose to $4 per kilo? 
ANSWER 
Demand rises to (approximately) 6 kilos at the reduced price of $2 per kilo. If the price rises to $4 per 
kilo, demand falls to (approximately) 3 kilos. 
 
Note that changes in demand caused by changes in price are represented by movements 
along the 
demand curve
,
 
from one point to another. These changes in quantity demanded in response to a change 
in price are called 
expansions 
or 
contractions 
in demand. The price has changed, and the quantity 
demanded changes (prompting a movement along the curve), but 
the demand curve itself remains the 
same
. 
4.3 The market demand curve
In the example above, we have been looking at the demand schedule of a single household. A 
market 
demand curve
 
is a similar curve, but it expresses the expected total quantity of the good that would be 
demanded by 
all consumers together
, at any given price. 
Market demand 
is the total quantity of a product that 
all
 
purchasers would want to buy at each price 
level. A market demand schedule and a market demand curve are therefore simply the sum of all the 
individual demand schedules and demand curves put together. Market demand curves would be similar 
to those in Figures 1 and 2 – sloping downwards from left to right – but with quantities demanded (total 
market demand) being higher at each price level. 
A