The demand for a commodity can be with respect to an individual and an entire market. However, Individual Demand is different from Market Demand.
Individual Demand
The quantity of a commodity a consumer is willing and able to purchase at every possible price during a specific time period is known as Individual Demand. There are various factors that affect (increase or decrease) the demand for a commodity; such as Price of the given Commodity, Price of Related Goods, Income of the Consumer, Tastes and Preferences, and Expectation of Change in the Price in Future.
Market Demand
The quantity of a commodity that all consumers are willing and able to purchase at every possible price during a specific time period is known as Market Demand. In addition to the factors affecting the individual demand for a commodity, there are other factors also that affect the market demand of the commodity; such as Size and Composition of Population, Season and Weather, and Distribution of Income.
Difference between Individual Demand and Market Demand
| Basis | Individual Demand | Market Demand |
|---|---|---|
| Meaning | The quantity of a commodity that a consumer is willing and able to purchase at every possible price during a specific time period is known as Individual Demand. | The quantity of a commodity that all consumers are willing and able to purchase at every possible price during a specific time period is known as Market Demand. |
| Law of Demand | Individual Demand may or may not follow the Law of Demand. It means that there is a possibility of a product’s demand to be higher at a higher price. | Market Demand always follows the Law of Demand. It means that the demand for a product always reduces when there is a rise in its price, and vice-versa. |
| Affect of factors | The individual demand for a product is not affected by every factor affecting its market demand. | The market demand for a product is affected by every factor affecting its individual demand. |
| Determinants | Various determinants of Individual Demand, include Price of the given Commodity, Price of Related Goods, Income of the Consumer, Tastes and Preferences, and Expectation of Change in the Price in Future. | In addition to the different determinants of individual demand, other determinants of Market Demand are Size and Composition of Population, Season and Weather, and Distribution of Income. |
| Curve | The curve of Individual Demand shows the quantity demanded by one consumer when there is a change in the price of the commodity. | The curve of Market Demand shows the relationship between the total quantity demanded and the market prices of the commodity. |
| Slope of Demand Curve | The slope of the individual demand curve is steeper. | The slope of the market demand curve is relatively flatter. |
Leave a Reply