Demand for a good by an individual market as a whole is conventionally expressed in three alternative forms i.e. a demand function, a demand schedule and a demand curve.
1. Demand Function:
A demand function of an individual buyer is an algebraic form of expressing his demand behavior. In it, the quantity demanded period of time is expressed as a function of (that is, determined by) several variables. A demand function may be in a generalized form or a specific form. the latter case, the function describes the exact manner in which quant demanded is supposed to vary in response to a change in one or mo independent variables. Some typical examples of a demand function for good X are:
(i) Dx = f(Px, Y, T); and
(ii) Dx = 2000-10Px.
Here, Dx denotes quantity of good demanded, Px denotes the price of good Y represents income level of the consumer and T is a measure of his taste: and preferences.
2. Demand Schedule:
A demand schedule is a tabular form of describing the shifts in quantity demanded of a good in response to shifts in its price per unit, while all non-price determining variables are remains unchanged. A demand schedule has two columns, namely (i) price per unit of the good (Px), and. (ii) quantity demanded per period (Dx). The demand schedule is a set of pairs of values of values of Px and Dx. The first column records the hypothetical values of Px, and the second column records the corresponding quantity (Dx) which the consumer would decide to buy if faced by that price.
3. Demand Curve:
A demand curve is a graphic representation of the demand schedule. It is a locus of pairs of per unit prices (Px) and the corresponding demand-quantities (Dx). The basic difference between a demand schedule and a demand curve in that in the former, Px and Dx are discrete variables. Their values vary in discrete steps and not continuously. In the case of a demand curve, however, both Px and Dx are assumed to be continuous variables. As a result, the demand curve is continuous without gaps.
Two approaches have been very popular in analyzing the demand behavior of a typical individual consumer, namely those based upon the concepts of (a) utility, and (b) indifference curves. We shall now study them.