Market demand v. firm demend

differences between market demand v. firm demand

1. Presentation on MARKET DEMAND vs FIRM DEMAND YASH GARG BBA-LLB SEMESTER-1 ST

2. WHAT Is DEMAND ? Demand is an economic principle referring to a consumer's desire to purchase goods and services and willingness to pay a price for a specific good or service. 

3. MEANING OF MARKET DEMAND Market demand is the total quantity demanded across all consumers in a market for a given good . We can add up the demand of all the various firm in the industry, if either the firm are producing the same product or close substitute.

4. Market demand curve The  market demand curve  is the summation of all the individual demand curves in a given market. It shows the quantity demanded of the good by all individuals at varying price points. The market demand curve is typically graphed and downward sloping because as price increases, the quantity demanded decreases.

5. Market demand curve

6. Meaning of firm demand Its is the demand by consumers for the product of firm. It may be different with respect to the structure of market. In case of monopoly, the demand and industry demand are equal to each other. Firm demand can also be called as RESIDUAL DEMAND In case of perfect competition, the firm demand is perfectly elastic as firm has to sell at a given price determined by the industry. In case of oligopoly, it is less closely related to the industry demand.

7. In case of monopolistic competition, it depends upon the degree of product differentiation. As it is the demand which has been leftover from the industry demand after the supply of product by other suppliers in the industry. Numerically, it can be presented as Dr = Di – So Dr = Residual demand Di = Industry demand So=Supply by other suppliers in the industry

8. Market and firm demand curves in a perfectly competitive market