Previous slide Next slide Back to the first slide View text version


Notes:

At each price we add the demands of the market participants, John & Jane.

This “horizontal summation” process give us the market demand curve.

Thus, when the price is 15, the total demand is 6.

When the price falls to 5, total demand increases to 17.

Individuals become price takers once the market price is determined. In other words, they purchase too little to have a significant affect on the market price.