Chapter 3 Appendix Outline
A. The Law of Demand and Consumer Behavior
1. The market demand schedule is the sum of the individual demand schedules of all consumers in the market.
2. The market demand curve is a graph of the market demand schedule.
a. This curve shows the various quantities that individuals plan to purchase at different prices, holding all other factors that affect demand constant.
b. A single point on this curve refers to quantity demanded.
1. Quantity demanded refers to the quantity that consumers plan to buyat a particular price.
c. The negative slope of the demand curve reflects the law of demand.
1. The law of demand states that more will be bought at lower prices.
2. The basis for this law is that as individuals consume additional units of a good, its marginal benefit will fall.
a. Because additional units are worth less, the only way to induce consumers to purchase them is to lower the price.

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