Economics | 2.3 Graphing a Demand Curve

In the table below, we have provided a list of consumers who are in the market for a new music CDs. Next to their name, we list the quantity of new CDs each one wants to buy. In the last column, we list the maximum price each one is willing and able to pay for the new product.

Name

Ashley Jacob Joseph Jordon Renee Emily Robert

Quantity

1 1 1 1 1 1 1

Maximum price willing to pay

15 18 14 16 20 13 17

Using these data and the blank table below, you will first construct a demand schedule and graph the results on a separate sheet of paper.

Step 1: Sort the data above by price. (2 points)

Step 2: For the last column, compute the total quantity demanded at each given price (remember that people willing to pay a higher price will still purchase at a lower price, so you will have to add together each possible buyer at each price). (5 points)

Hint: Look at your table. Is the total quantity demanded largest at the highest price or at the lowest price?

Step 3:Using the Price and Total Quantity Demanded data from the table below, graph the demand curve on the axes provided (be sure to provide numbers on the axes for price and quantity demanded). (10 points)

Demand Schedule

-----------------------------------

Total QuantityI Demanded

I

I

I

I

I

I

I

I

I

Questions to answer: (1 point each)

• If the price for music CDs is $15, how many CDs should be sold?
• If the price for CDs is raised to $18, how many should be sold?
• If the price is dropped to $12 per CD, how many should sell?