Percentage Change in Quantity Demanded

Oct 13, 2025 by wbrum.org 120 views

The Price of Graphic T-Shirts: A Demand Schedule Analysis

Understanding the Demand Schedule

A demand schedule is a table that shows the relationship between the price of a product and the quantity demanded by consumers. In this article, we will analyze a demand schedule for graphic T-shirts and explore how the price of these shirts affects the quantity demanded.

The Demand Schedule

The demand schedule for graphic T-shirts is as follows:

Price per Graphic Tee	Quantity Demanded
$5.00	50
$7.50	40
$10.00	30

Analyzing the Demand Schedule

From the demand schedule, we can see that as the price of graphic T-shirts increases, the quantity demanded decreases. This is a classic example of the law of demand, which states that as the price of a product increases, the quantity demanded decreases, ceteris paribus (all other things being equal).

The Law of Demand

The law of demand is a fundamental concept in economics that explains how changes in the price of a product affect the quantity demanded by consumers. The law states that as the price of a product increases, the quantity demanded decreases, and as the price of a product decreases, the quantity demanded increases.

The Price Elasticity of Demand

The price elasticity of demand is a measure of how responsive the quantity demanded is to changes in the price of a product. If the price elasticity of demand is high, it means that a small change in the price of a product will result in a large change in the quantity demanded. If the price elasticity of demand is low, it means that a large change in the price of a product will result in a small change in the quantity demanded.

Calculating the Price Elasticity of Demand

To calculate the price elasticity of demand, we need to use the following formula:

Price Elasticity of Demand = (Percentage Change in Quantity Demanded) / (Percentage Change in Price)

Using the data from the demand schedule, we can calculate the price elasticity of demand as follows:

Price per Graphic Tee	Quantity Demanded	Percentage Change in Quantity Demanded	Percentage Change in Price
$5.00	50	-20%	-33.33%
$7.50	40	-25%	-33.33%
$10.00	30	-30%	-33.33%

Interpreting the Results

From the results, we can see that the price elasticity of demand is high, which means that a small change in the price of graphic T-shirts will result in a large change in the quantity demanded. This is because the quantity demanded is highly responsive to changes in the price of the product.

The Demand Curve

The demand curve is a graphical representation of the demand schedule. It shows the relationship between the price of a product and the quantity demanded by consumers. The demand curve is downward-sloping, which means that as the price of a product increases, the quantity demanded decreases.

The Supply Curve

The supply curve is a graphical representation of the supply schedule. It shows the relationship between the price of a product and the quantity supplied by producers. The supply curve is upward-sloping, which means that as the price of a product increases, the quantity supplied increases.

The Equilibrium Price and Quantity

The equilibrium price and quantity are the price and quantity at which the quantity demanded equals the quantity supplied. In a competitive market, the equilibrium price and quantity are determined by the intersection of the demand curve and the supply curve.

Conclusion

In conclusion, the demand schedule for graphic T-shirts shows that as the price of these shirts increases, the quantity demanded decreases. This is a classic example of the law of demand, which states that as the price of a product increases, the quantity demanded decreases, ceteris paribus. The price elasticity of demand is high, which means that a small change in the price of graphic T-shirts will result in a large change in the quantity demanded. The demand curve is downward-sloping, and the supply curve is upward-sloping. The equilibrium price and quantity are determined by the intersection of the demand curve and the supply curve.

References

Mankiw, G. N. (2017). Principles of Economics. Cengage Learning.
Krugman, P. R., & Obstfeld, M. (2018). International Economics: Theory and Policy. Pearson.
Varian, H. R. (2014). Microeconomic Analysis. W.W. Norton & Company.

Business Applications

The demand schedule for graphic T-shirts has several business applications. For example:

Pricing Strategy: A company that sells graphic T-shirts can use the demand schedule to determine the optimal price for their product. If the demand schedule shows that the quantity demanded decreases as the price increases, the company can set a higher price to maximize profits.
Market Research: A company that sells graphic T-shirts can use the demand schedule to conduct market research. By analyzing the demand schedule, the company can determine the price elasticity of demand and understand how changes in the price of the product will affect the quantity demanded.
Marketing Strategy: A company that sells graphic T-shirts can use the demand schedule to develop a marketing strategy. By analyzing the demand schedule, the company can determine the optimal price and quantity to sell in order to maximize profits.

Conclusion

In conclusion, the demand schedule for graphic T-shirts is a useful tool for businesses that sell these products. By analyzing the demand schedule, companies can determine the optimal price and quantity to sell in order to maximize profits. The demand schedule also provides valuable insights into the price elasticity of demand, which can be used to develop effective pricing and marketing strategies.
Demand Schedule Q&A: Understanding the Price of Graphic T-Shirts

Frequently Asked Questions

In this article, we will answer some of the most frequently asked questions about the demand schedule for graphic T-shirts.

Q: What is a demand schedule?

A: A demand schedule is a table that shows the relationship between the price of a product and the quantity demanded by consumers.

Q: What is the law of demand?

A: The law of demand states that as the price of a product increases, the quantity demanded decreases, ceteris paribus (all other things being equal).

Q: What is the price elasticity of demand?

A: The price elasticity of demand is a measure of how responsive the quantity demanded is to changes in the price of a product.

Q: How do I calculate the price elasticity of demand?

A: To calculate the price elasticity of demand, you need to use the following formula:

Price Elasticity of Demand = (Percentage Change in Quantity Demanded) / (Percentage Change in Price)

Q: What is the demand curve?

A: The demand curve is a graphical representation of the demand schedule. It shows the relationship between the price of a product and the quantity demanded by consumers.

Q: What is the supply curve?

A: The supply curve is a graphical representation of the supply schedule. It shows the relationship between the price of a product and the quantity supplied by producers.

Q: What is the equilibrium price and quantity?

A: The equilibrium price and quantity are the price and quantity at which the quantity demanded equals the quantity supplied.

Q: How do I use the demand schedule to determine the optimal price for my product?

A: To use the demand schedule to determine the optimal price for your product, you need to analyze the demand schedule and determine the price elasticity of demand. If the demand schedule shows that the quantity demanded decreases as the price increases, you can set a higher price to maximize profits.

Q: What are some business applications of the demand schedule?

A: Some business applications of the demand schedule include:

Pricing Strategy: A company can use the demand schedule to determine the optimal price for their product.
Market Research: A company can use the demand schedule to conduct market research and determine the price elasticity of demand.
Marketing Strategy: A company can use the demand schedule to develop a marketing strategy and determine the optimal price and quantity to sell in order to maximize profits.

Q: What are some common mistakes to avoid when using the demand schedule?

A: Some common mistakes to avoid when using the demand schedule include:

Not considering the price elasticity of demand: Failing to consider the price elasticity of demand can lead to incorrect pricing decisions.
Not analyzing the demand schedule: Failing to analyze the demand schedule can lead to incorrect conclusions about the price elasticity of demand.
Not considering other factors that affect demand: Failing to consider other factors that affect demand, such as changes in consumer preferences or income, can lead to incorrect conclusions about the price elasticity of demand.

Conclusion

In conclusion, the demand schedule is a useful tool for businesses that sell graphic T-shirts. By analyzing the demand schedule, companies can determine the optimal price and quantity to sell in order to maximize profits. The demand schedule also provides valuable insights into the price elasticity of demand, which can be used to develop effective pricing and marketing strategies.

References

Mankiw, G. N. (2017). Principles of Economics. Cengage Learning.
Krugman, P. R., & Obstfeld, M. (2018). International Economics: Theory and Policy. Pearson.
Varian, H. R. (2014). Microeconomic Analysis. W.W. Norton & Company.

Business Applications

The demand schedule has several business applications, including:

Pricing Strategy: A company can use the demand schedule to determine the optimal price for their product.
Market Research: A company can use the demand schedule to conduct market research and determine the price elasticity of demand.
Marketing Strategy: A company can use the demand schedule to develop a marketing strategy and determine the optimal price and quantity to sell in order to maximize profits.

Conclusion