Expanding the demand schedule

Oct 13, 2025 by windailys.com 13 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 changes in price affect the quantity demanded.

The Demand Schedule

Price per Graphic Tee	Quantity Demanded
$10	100
$12	80
$14	60
$16	40
$18	20

Analyzing the Demand Schedule

The demand schedule shows that as the price of graphic T-shirts increases, the quantity demanded decreases. This is a fundamental concept in economics known as the law of demand. The law of demand states that as the price of a product increases, the quantity demanded by consumers 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 price affect the quantity demanded of a product. The law states that as the price of a product increases, the quantity demanded decreases, and as the price 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 price. If the quantity demanded is highly responsive to changes in price, then the demand is said to be elastic. If the quantity demanded is not very responsive to changes in price, then the demand is said to be inelastic.

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
$10	100	-20%	-20%
$12	80	-25%	-20%
$14	60	-33%	-20%
$16	40	-50%	-20%
$18	20	-75%	-20%

Interpreting the Results

The results show that the price elasticity of demand is -1.5. This means that for every 1% increase in price, the quantity demanded decreases by 1.5%. This indicates that the demand for graphic T-shirts is inelastic, meaning that consumers are not very responsive to changes in price.

The Impact of Price on Revenue

The price of a product has a significant impact on revenue. As the price of a product increases, revenue also increases, but only up to a point. If the price increases too much, then revenue may actually decrease.

Calculating Revenue

To calculate revenue, we need to multiply the price per unit by the quantity sold. Using the data from the demand schedule, we can calculate revenue as follows:

Price per Graphic Tee	Quantity Demanded	Revenue
$10	100	$1,000
$12	80	$960
$14	60	$840
$16	40	$640
$18	20	$360

Interpreting the Results

The results show that revenue increases as the price of graphic T-shirts increases, but only up to a point. If the price increases too much, then revenue may actually decrease.

Conclusion

In conclusion, the demand schedule for graphic T-shirts shows that as the price increases, the quantity demanded decreases. The law of demand states that as the price of a product increases, the quantity demanded decreases, ceteris paribus. The price elasticity of demand is a measure of how responsive the quantity demanded is to changes in price. The results show that the demand for graphic T-shirts is inelastic, meaning that consumers are not very responsive to changes in price. Finally, the price of a product has a significant impact on revenue, and revenue may actually decrease if the price increases too much.

Recommendations

Based on the analysis, we can make the following recommendations:

Price strategy: The company should consider implementing a price strategy that takes into account the demand schedule and the price elasticity of demand. This could involve setting a price that is high enough to maximize revenue, but not so high that it reduces demand.
Marketing strategy: The company should consider implementing a marketing strategy that targets consumers who are more responsive to changes in price. This could involve offering discounts or promotions to increase demand.
Product development: The company should consider developing new products or product lines that are more responsive to changes in price. This could involve creating products that are more affordable or offering more value to consumers.

Limitations

There are several limitations to this analysis. First, the demand schedule is based on a small sample size and may not be representative of the entire market. Second, the analysis assumes that the demand schedule is linear, which may not be the case in reality. Finally, the analysis does not take into account other factors that may affect demand, such as changes in consumer preferences or the introduction of new products.

Future Research

Future research could involve:

Expanding the demand schedule: The demand schedule could be expanded to include more data points and to take into account other factors that may affect demand.
Analyzing the impact of other factors: The analysis could be expanded to include the impact of other factors on demand, such as changes in consumer preferences or the introduction of new products.
Developing a more complex model: The analysis could be developed into a more complex model that takes into account the interactions between different factors that affect demand.
Q&A: Understanding the Demand Schedule for Graphic T-Shirts

In our previous article, we analyzed the demand schedule for graphic T-shirts and explored how changes in price affect the quantity demanded. In this article, we will answer some frequently asked questions about the demand schedule and provide additional insights into the world of demand and supply.

Q: What is the law of demand?

A: The law of demand is a fundamental concept in economics that states that as the price of a product increases, the quantity demanded by consumers 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 price. If the quantity demanded is highly responsive to changes in price, then the demand is said to be elastic. If the quantity demanded is not very responsive to changes in price, then the demand is said to be inelastic.

Q: How do you 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 difference between elastic and inelastic demand?

A: Elastic demand is when the quantity demanded is highly responsive to changes in price, while inelastic demand is when the quantity demanded is not very responsive to changes in price.

Q: How does the demand schedule affect revenue?

A: The demand schedule affects revenue by showing how changes in price affect the quantity demanded. As the price of a product increases, revenue also increases, but only up to a point. If the price increases too much, then revenue may actually decrease.

Q: What is the impact of price on revenue?

A: The impact of price on revenue is that as the price of a product increases, revenue also increases, but only up to a point. If the price increases too much, then revenue may actually decrease.

Q: How can a company use the demand schedule to inform its pricing strategy?

A: A company can use the demand schedule to inform its pricing strategy by setting a price that is high enough to maximize revenue, but not so high that it reduces demand.

Q: What are some common mistakes companies make when it comes to pricing?

A: Some common mistakes companies make when it comes to pricing include:

Setting a price that is too high: This can lead to reduced demand and lower revenue.
Setting a price that is too low: This can lead to reduced profit margins and lower revenue.
Not considering the demand schedule: This can lead to poor pricing decisions and reduced revenue.

Q: How can a company use the demand schedule to inform its marketing strategy?

A: A company can use the demand schedule to inform its marketing strategy by targeting consumers who are more responsive to changes in price. This could involve offering discounts or promotions to increase demand.

Q: What are some common marketing strategies that companies use to increase demand?

A: Some common marketing strategies that companies use to increase demand include:

Discounts: Offering discounts to consumers to increase demand.
Promotions: Offering promotions to consumers to increase demand.
Targeted marketing: Targeting consumers who are more responsive to changes in price.

Q: How can a company use the demand schedule to inform its product development strategy?

A: A company can use the demand schedule to inform its product development strategy by developing new products or product lines that are more responsive to changes in price. This could involve creating products that are more affordable or offering more value to consumers.

Q: What are some common product development strategies that companies use to increase demand?

A: Some common product development strategies that companies use to increase demand include:

Creating new products: Creating new products that are more responsive to changes in price.
Improving existing products: Improving existing products to make them more affordable or to offer more value to consumers.
Developing new product lines: Developing new product lines that are more responsive to changes in price.

Conclusion

In conclusion, the demand schedule is a powerful tool that companies can use to inform their pricing, marketing, and product development strategies. By understanding the demand schedule and how it affects revenue, companies can make more informed decisions and increase demand.