<p>In a Perfectly Competitive setting;</p>
<p>The market demand Curve is basically the horizontal summation of the individual demand curves for a commodity, say good '<span class="math-container">$x$</span>', so when you are talking about changes(movements along the curve) in the market demand curve of good'<span class="math-container">$x$</span>' due to changes in the price of good '<span class="math-container">$x$</span>', you are also taking into account the changes in the individual behaviour which are the underlying building blocks of any market demand curve.</p>
<p>The market supply curve is also the horizontal sum of the individual supply curves of many producers in a economy, when the price of a good increases more and more producers see it as an opportunity to make positive profits and hence increase the quantity produced in the equilibrium which also incentivizes new entrants to enter the industry, ultimately the supply of the good '<span class="math-container">$x$</span>' increases as the price of good '<span class="math-container">$x$</span>' increases.</p>

CC BY-SA 4.0
2024-10-04T06:28:44.323Z
2024-10-04T06:28:44.323Z
econhead
<p><strong>Demand</strong></p>
<p>For the demand curve in microeconomics -as far as I know, we look at it as the demand as a whole for that certain market over a range of prices rather than considering it as the demand curve for a range of prices for an individual consumer.</p>
<p>-If we are to look at the curve to be representing just a single customer. When the price decreases for a good , then a person is willing to buy more quantity as they see it as more of a bargain / they are only willing to buy more of it if the unit price is cheaper as they value each unit less the more they have</p>
<p>-However, if we are to look at the demand curve as representing all the demanders in the market over a range of prices. The concept is somewhat different,since as the price decreases the quantity increases, id say this is mainly because the people who were only willing to buy that product if it was cheaper are now actively purchasing in the market and so are the people who were willing to purchase it at a higher price(ie further up the curve) so basically more people are &quot;activated&quot; so to speak .</p>
<p>So while the previous statement is true that an individual themselves is willing to buy more of a good the cheaper it is, the most influential reason why the quantity increased was simply because more people are willing to buy rather than an individual themselves are willing to buy more .This is why I view this it as a market demand curve</p>
<p><strong>Supply</strong></p>
<p>Now for supply, I can ONLY view this supply curve as representing all the suppliers in the market rather than an individual supplier themselves . Simply because if the price increased it would make sense that more suppliers are now &quot;activated&quot; or incentivised to produce the product now as the price is higher for it . However, when it comes to viewing this supply curve as showing just an individual supplier (like I had a similarly done for demand), things go awry as there is no similar theory of DMU for supply, also if I were to say suppliers are willing to produce more of a good if the price of the good was more as now they can make more money, this would go against economies of scale for an individual firm ,who are usually willing to take a lower price per good as long as u buy more units.so the lower you want per unit, they would expect you to buy more units of that good.</p>
<p>Is my understanding of the curves so far right or wrong (especially the supply curve as I believe my knowledge on why its upwards sloping is incomplete)</p>

CC BY-SA 4.0
2024-10-01T00:53:18.053Z
What's your question?
Herr K.
CC BY-SA 4.0
2024-10-01T07:46:55.017Z
The market demand/supply curve is just the (horizontal) sum of the individual demand/supply curves. On the firm side, the assumption corresponding to decreasing marginal utility of consumption is increasing marginal cost of production. Decreasing marginal utility leads to downward sloping individual demand curves since consumer surplus is maximized at $q>0$ when $p=MU(q)$. Increasing marginal cost leads to upward sloping individual supply curves since profit/producer surplus is maximized at $q>0$ when $p=MC(q)$.
smcc
CC BY-SA 4.0
2024-10-01T08:06:19.883Z
@HerrK. I was just seeing if my understanding of the curves was right or wrong , as i had 2 different thought processes as to why the demand curve was downward sloping and the supply curve was upwards sloping.
j jose
CC BY-SA 4.0
2024-10-01T10:57:28.923Z
@smcc so is my comment about the supply curve being upward sloping since as the price increases more suppliers are now incentivized to produce the product so now there are people who are willing to supply at this higher new price plus the suppliers who were willing to supply at the lower previous prices .
j jose
<microeconomics>
Simple question regarding supply and demand curve in microeconomics
j jose
# Simple question regarding supply and demand curve in microeconomics

(Asked by: username_0 on 2024-10-01)

**Demand**

For the demand curve in microeconomics -as far as I know, we look at it as the demand as a whole for that certain market over a range of prices rather than considering it as the demand curve for a range of prices for an individual consumer.

-If we are to look at the curve to be representing just a single customer. When the price decreases for a good , then a person is willing to buy more quantity as they see it as more of a bargain / they are only willing to buy more of it if the unit price is cheaper as they value each unit less the more they have

-However, if we are to look at the demand curve as representing all the demanders in the market over a range of prices. The concept is somewhat different,since as the price decreases the quantity increases, id say this is mainly because the people who were only willing to buy that product if it was cheaper are now actively purchasing in the market and so are the people who were willing to purchase it at a higher price(ie further up the curve) so basically more people are "activated" so to speak .

So while the previous statement is true that an individual themselves is willing to buy more of a good the cheaper it is, the most influential reason why the quantity increased was simply because more people are willing to buy rather than an individual themselves are willing to buy more .This is why I view this it as a market demand curve

**Supply**

Now for supply, I can ONLY view this supply curve as representing all the suppliers in the market rather than an individual supplier themselves . Simply because if the price increased it would make sense that more suppliers are now "activated" or incentivised to produce the product now as the price is higher for it . However, when it comes to viewing this supply curve as showing just an individual supplier (like I had a similarly done for demand), things go awry as there is no similar theory of DMU for supply, also if I were to say suppliers are willing to produce more of a good if the price of the good was more as now they can make more money, this would go against economies of scale for an individual firm ,who are usually willing to take a lower price per good as long as u buy more units.so the lower you want per unit, they would expect you to buy more units of that good.

Is my understanding of the curves so far right or wrong (especially the supply curve as I believe my knowledge on why its upwards sloping is incomplete)

**Tags:** microeconomics
> **Comments:**
> **username_1**: What's your question?  
> **username_2**: The market demand/supply curve is just the (horizontal) sum of the individual demand/supply curves. On the firm side, the assumption corresponding to decreasing marginal utility of consumption is increasing marginal cost of production. Decreasing marginal utility leads to downward sloping individual demand curves since consumer surplus is maximized at $q>0$ when $p=MU(q)$. Increasing marginal cost leads to upward sloping individual supply curves since profit/producer surplus is maximized at $q>0$ when $p=MC(q)$.  
> **username_0**: @HerrK. I was just seeing if my understanding of the curves was right or wrong , as i had 2 different thought processes as to why the demand curve was downward sloping and the supply curve was upwards sloping.  
> **username_0**: @smcc so is my comment about the supply curve being upward sloping since as the price increases more suppliers are now incentivized to produce the product so now there are people who are willing to supply at this higher new price plus the suppliers who were willing to supply at the lower previous prices .  

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## 1 answers

### Answer by username_3 on 2024-10-04. Score: 0

In a Perfectly Competitive setting;

The market demand Curve is basically the horizontal summation of the individual demand curves for a commodity, say good '$x$', so when you are talking about changes(movements along the curve) in the market demand curve of good'$x$' due to changes in the price of good '$x$', you are also taking into account the changes in the individual behaviour which are the underlying building blocks of any market demand curve.

The market supply curve is also the horizontal sum of the individual supply curves of many producers in a economy, when the price of a good increases more and more producers see it as an opportunity to make positive profits and hence increase the quantity produced in the equilibrium which also incentivizes new entrants to enter the industry, ultimately the supply of the good '$x$' increases as the price of good '$x$' increases.


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