The demand schedule for a good in a market, that is, the statement of the varying amounts of the good which will be demanded at different prices, is a combination of the individual demand schedules of the different purchasers in that market. The individual's demand schedule for a good varies with the utility of the good for him and with his purchasing power. The greater the utility of the good to the individual, other things being equal, the more he will be willing to pay for the good; and also the more money he has with which to buy the good, other things being equal, the more he will be willing to pay for it. Assuming that the three individuals, A, B, and C, have individual demand schedules for good x as represented in the first three columns below, their combined demand schedule is represented in the fourth column. In a similar way we can think of the total demand for a good in a market as being a combination of all of the individual demand schedules.

Maximum Prices which A, B, and C Would Pay if Necessary for Varying Amounts of the Good X, Together with Their Combined Demand Schedule1

A

B

G

A, B, and G

TOGETHER

would pay if necessary for 1 unit of good x ....................

.70

1.30

1.50

1.50

each of 2 units of good x.......

.60

1.20

1.40

1.40

each of 3 units of good x .......

.50

1.00

1.10

1.30

each of 4 units of good x..........

.40

.80

.90

1.20

each of 5 units of good x . . . .

1.10

each of 6 units of good x . . . .

1.00

each of 7 units of good x . . . .

.90

each of 8 units of good x . . . .

.80

each of 9 units of good x . . . .

.70

each of 10 units of good x . . .

.60

each of 11 units of good x ...

.50

each of 12 units of good x . . .

.40

If A, B, and C are the only purchasers in this market for the good x, it will readily be seen from the individual schedules under A and B and C that the price which can be secured for one unit of the good x if offered in the market is one dollar and fifty cents. This is the outside limit of what C would pay for it. If two units of the good were offered for sale, the maximum price which can be secured is one dollar and forty cents and C will pay this price if it is necessary to pay so much to secure them. If three units of the good are offered in the market, the price per unit will be one dollar and thirty cents and C will secure two and B will take one. If four units of the good x are offered for sale, the highest price per unit will be one dollar and twenty cents. At this price C will take two units and B will take two units. When five units are offered for sale the maximum price will be one dollar and ten cents. At this price C will purchase three and B will purchase two units, and so forth.

1 The table assumes a more regular falling off in demand than is likely to be met with in an actual market.