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December 15, 2018 

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NORMAL PROFIT: The opportunity cost of using entrepreneurial abilities in the production of a good, or the profit that could have been received in another business venture. Like the opportunity costs of other resources, normal profit is deducted from revenue to determine economic profit. It is, however, never included as an accounting cost when accounting profit is computed.

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DEMAND SCHEDULE:

A table that illustrates the alternative quantities of a commodity demanded at different prices. A demand schedule is a simple means of summarizing information about demand price and quantity demanded for a particular good. It is used to highlight the law of demand. It can also be used to derive a demand curve.
A demand schedule is a useful set of information that can summarize several of the more important aspects of demand.

Setting Up the Table

The table in this exhibit displays the Shady Valley demand schedule for stuffed Yellow Tarantulas, a cute and cuddly stuffed creature from the Wacky Willy Stuffed Amigos line of collectibles.

This table contains three columns. The first contains reference labels A, B, C, etc. for each price-quantity pair. The second is the demand price, ranging from $5 to $50. And the third is the quantity demanded, ranging from 0 to 90 Yellow Tarantulas. This schedule assumes other ceteris paribus factors remain unchanged and that the quantities are those demanded during a one year time period.

Running Through the Numbers

Here are a few observations about this demand schedule.
  • First, as the price increases from a low of $5 to a high of $50, the quantity demanded of Yellow Tarantulas decreases from 90 to 0. Lower prices are related to larger quantities. This relation, this inverse relation between demand price and quantity demanded, IS the basic law of demand.

  • Second, the numbers in the schedule represent maximum values. That is, if the price is $5, then the maximum quantity demanded is 90 Yellow Tarantulas. It is not 150, nor even 91, but only 90. Alternatively, if buyers purchase 90 Yellow Tarantulas, then the maximum demand price they are willing and able to pay is $5, not $6, not even $5.01, but only $5.

  • Third, this whole schedule, all ten pairs of the price-quantity numbers (and all others that could be included) is demand. Demand is the entire range of prices and quantities, all pairs. In contrast, quantity demanded is any specific number of Yellow Tarantulas that buyers are willing and able to buy at a specific demand price. Selecting a different price generates a different quantity demanded.

  • Fourth, these numbers are hypothetical, not just in the sense that they were made up to illustrate demand, but in the sense that they suggest a "What if" relation. This particular schedule does not indicate the actual demand price of Yellow Tarantulas nor the actual quantity demanded. It only indicates quantity demanded given demand price, or demand price given the quantity demanded. If, for example, the demand price is $5, then buyers are willing and able to purchase 90 Yellow Tarantulas. This does not mean that buyers have purchased, are purchasing, or ever will purchase 90 Yellow Tarantulas. It only indicates what they would purchase at a $5 price.

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Recommended Citation:

DEMAND SCHEDULE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: December 15, 2018].


Check Out These Related Terms...

     | demand price | quantity demanded | law of demand | demand curve | demand space | consumer surplus | demand determinants | change in demand | change in quantity demanded | supply schedule |


Or For A Little Background...

     | demand | market | quantity | price | unlimited wants and needs | economic analysis | exchange | scarcity | good | service | satisfaction |


And For Further Study...

     | market demand | competition | value | consumer sovereignty | competitive market | efficiency | income effect | substitution effect |


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