Individual demand is what one buyer wants at each price. Market demand is the total of every buyer’s quantity at each price. To build it, add quantities across buyers at the same price, never the prices themselves.
This lesson completes demand relationships by linking single choices to a whole market, which supply and equilibrium work later depends on. See supply and equilibrium.
How do you add buyers, step by step?
- List each buyer’s quantity demanded at the same set of prices.
- For each price, add the quantities across buyers.
- Write the totals as the market demand schedule.
- If a buyer enters or leaves, add or remove that buyer’s column and recalculate.
Worked example
The fictional Seri stall in Kampung Seri has three regular lime tea buyers. Their daily demand is:
| Price (RM) | Aina | Bala | Chen | Market |
|---|---|---|---|---|
| 2 | 6 | 4 | 8 | 18 |
| 3 | 5 | 3 | 6 | 14 |
| 4 | 4 | 2 | 4 | 10 |
| 5 | 3 | 1 | 2 | 6 |
| 6 | 2 | 0 | 0 | 2 |
Check one row: at RM4, 4 + 2 + 4 = 10. The three schedules fit Aina: 8 − P, Bala: 6 − P and Chen: 12 − 2P.
Summing, the market is 26 − 4P. At RM3 that gives 26 − 12 = 14, which matches.
Now a fourth buyer, Devi, starts coming to the stall. Her demand is 7 − P: 5, 4, 3, 2, 1 cups at RM2 to RM6.
| Price (RM) | Old market | Devi | New market |
|---|---|---|---|
| 2 | 18 | 5 | 23 |
| 3 | 14 | 4 | 18 |
| 4 | 10 | 3 | 13 |
| 5 | 6 | 2 | 8 |
| 6 | 2 | 1 | 3 |
Market demand is now 33 − 5P. Every price has a higher quantity, so the market curve has shifted right. A new buyer is a non-price factor, so this is a shift, not a movement.
The mistake to watch for
Mistaken answer: “At RM4 Aina pays RM4, Bala RM4 and Chen RM4, so the market price is RM12.”
The student added the price once for each buyer. In demand, buyers face the same price.
It is the quantities that add: 4 + 2 + 4 = 10 cups at RM4. Correct approach: keep one price, add across buyers, and write the unit (cups).
Check yourself
1. Two fictional buyers have demand 10 − 2P and 6 − P. What is market demand at RM2?
Show answer
Buyer 1 wants 10 − 4 = 6. Buyer 2 wants 6 − 2 = 4. Market: 10 cups.
2. Using the Aina, Bala and Chen table, what is market demand at RM6, and why is it so low?
Show answer
2 cups. Only Aina still buys, at 2 cups, because Bala and Chen demand zero at RM6.
3. A fictional buyer, Bala, leaves town. Using the first table, what is the new market demand at RM3?
Show answer
Remove Bala’s 3: 14 − 3 = 11 cups (Aina 5 + Chen 6). The curve shifts left.
Where this leads next
Try the mixed practice set, then explore the shift in the demand, supply and shift explorer. If adding buyers or reading shifts still catches you out, see online one-to-one Economics tuition.