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Economic Indicators FEBRUARY 2006: Prepared for the Joint Economic Committee by the Council of Economic Advisers

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Individual demand gives the quantity purchased for each price. Analogously, the market demand gives the quantity purchased by all the market participants – the sum of the individual demands – for each price. This is sometimes called a “horizontal sum” because the summation is over the quantities for each price. An example is illustrated in Figure 2-7. For a given price p, the quantity q1 demanded by one consumer, and the quantity q2 demanded by a second consumer are illustrated. The sum of these quantities represents the market demand, if the market has.