Customers’ desire for your product reveals itself in the price tag. Consider this experiment: A bakery owner normally charges $8 for a loaf of sourdough bread and sells 200 loaves a week. She drops the price to $6 for a one-day sale—and 300 loaves fly off the shelves. The next week, she raises the price to $9 to cover flour costs. Sales dip to 100 loaves.

She just created a real-world demand schedule, revealing exactly how price affects customer behavior. Understanding product demand means you can forecast sales with precision, maximize revenue, and better manage your resources.

What is a demand schedule?

A demand schedule is a table that shows how much people are willing to pay for your products. It maps the precise relationship between different price points and the quantity customers will actually buy during a specific time period. It answers the question: “How many units of a product will people purchase at any given price?”

A demand schedule reveals the inverse relationship between price and quantity. That typically means as the price decreases, the quantity demanded rises. As the price increases, the quantity demanded by customers will likely decrease. This is driven by consumer behavior—when an item is more affordable, more people may find the value proposition compelling. The benefits now justify the cost. Conversely, when a product rises in cost, some consumers get priced out or decide the product utility no longer matches the expense.

A demand schedule can help you:

• Understand consumer preferences. A demand schedule provides solid data on how your target market values your offerings. It shows consumer behavior in a clear, numerical format based on facts rather than assumptions.
• Optimize pricing strategies. Mapping out demand at various pricepoints lets you identify the right market price that will maximize revenue and profit.
• Forecast sales and manage inventory. Understanding demand leads to more accurate sales forecasting, which helps you manage inventory to prevent costly overstocking or frustrating stockouts.
• Make informed business decisions. Whether you’re considering a new marketing campaign, product launch, or expansion, a solid grasp of demand can help you decide with confidence.

Demand schedule vs. supply schedule

The demand schedule focuses on the buyer’s side. The supply schedule represents the seller’s perspective. These two schedules are the pillars of the supply-and-demand model from basic economics. 

The supply schedule shows the quantity of a product that business owners are willing and able to sell at various pricepoints. Unlike the demand schedule, the supply schedule relationship is direct. When the price goes up, business owners are incentivized to sell a higher quantity.

The two schedules work in the opposite direction. Buyers want the lowest price possible; sellers want the highest. The point where these interests meet is the equilibrium—a stable market price both sides can accept. 

How an individual demand schedule works

An individual demand schedule shows how many units of a product one person would buy at different prices. It provides a micro-level view of their purchasing habits, showing how their personal valuation of a product interacts with price. While it’s represented by a table, the underlying concept can be expressed as a simple function, which is unique to every individual,

For example, let’s say a customer named Anna has the following weekly demand for coffee from a local café:

This table illustrates Anna’s personal demand in action. At $5, she buys coffee as an occasional treat. As the price drops, she is willing to purchase it more frequently, illustrating the relationship between price and quantity demanded.

However, it’s not practical—or even possible—for a business owner to create a detailed demand schedule for every single customer. Instead, the individual demand schedule is best understood as a conceptual tool. A business owner can create a schedule for a representative customer through surveys or market research, or by analyzing sales data. 

How a market demand schedule works

A market demand schedule shows the total quantity of a product that all consumers in a market are willing and able to buy at various prices. It’s essentially the sum of every individual demand schedule in your market. 

By understanding the buying habits of this model consumer, the business can then estimate the total market demand. Depending on the number of customers in your demand schedule, you would add the total for each individual at every price point to determine the total market demand. 

To create a market demand schedule, let’s expand our example to include two more customers, Tim and Sara.

This market demand schedule gives the owner a much broader and more useful data set. It reveals the total sales the business can expect at each given price. If the owner is able to include data from more customers, it will be even more useful.

How to use demand curve graphing

One of the most powerful ways to use a demand schedule is through a visual representation known as a demand curve. A demand graph plots the data from your schedule to show the correlation between price and quantity.

In demand curve graphing, the vertical axis (y-axis) represents price, and the horizontal axis (x-axis) represents quantity demanded.  Plot the points from your market demand schedule and connect them with a line.

As predicted by the economic law of demand, the demand curve slopes downward from the upper left to the lower right. This downward slope is the graphical representation of the inverse relationship: a higher price corresponds to a lower quantity, and a lower price corresponds to a higher quantity. Every point on the curve shows how many unitsconsumers purchase at a specific price.