What is the 'Demand Schedule'
The demand schedule, in economics, is a table of the quantity demanded of a good at different price levels. Given the price level, it is easy to determine the expected quantity demanded. This demand schedule can be graphed as a continuous demand curve on a chart where the Y-axis represents price and the X-axis represents quantity.
BREAKING DOWN 'Demand Schedule'By showing the relationship between price and quantity, the demand schedule most commonly consists of two columns. The first column lists the current price of a product, listed in ascending or descending order. The second column lists the quantity of the product that is desired, or demanded, at that price. As the price rises, the quantity demanded tends to reduce.
When the data in the table is graphed, creating the demand curve, it demonstrates the relationship between various price points and the corresponding demand. The demand curve can provide a way to estimate the demand for the product at any point along the curve.
Demand and Supply Schedules
A demand schedule is typically used in conjunction with a supply schedule showing the quantity of a good that would be supplied to the market at given price levels. Graphing both schedules on a chart with the axes described above, it is possible to obtain a graphical representation of the supply and demand dynamics of a particular market. Ceteris paribus, the market reaches equilibrium where the supply and demand schedules intersect. At this point, the corresponding price is the equilibrium market price, and the corresponding quantity is the equilibrium quantity exchanged in the market.
Additional Factors on Demand
Price is not the sole factor in determining the demand for a particular product. Demand may also be affected by the amount of disposable income available, as well as shifts in the quality of the goods in question. Effective advertising can increase demand as well as expectations that the price of a product will rise in the future.
If the price of one product rises, demand for a substitute of that product may rise, while a fall in the price of a product may increase demand for its complements. For example, a rise in the price of one brand of coffeemaker may increase the demand for the substitute coffeemaker produced by a competitor. If the price of coffeemakers fall, the demand for coffee, a complement to the coffeemaker market, may rise.
Weather can impact demand, as cooler weather prompts people to purchase warmer clothes and heaters, while warmer weather prompts people to buy swimsuits and air conditioners. The presence of rain may increase umbrella sales, while snow leads to more snow tire purchases.