Markets are made up of many individual participants on the demand and supply side. The supply and demand functions that we have worked with in this chapter are those for the total of all participants on each side of the market. But how do we arrive at such market functions when the economy is composed of individuals? We can illustrate how, with the help of Figure 3.9.
At 
individual A purchases 
and B purchases 
. The total demand is the sum of these individual demands at this price (
). At 
individual demands are summed to Q2. Since the points 
and 
define the demands of the market participants it follows that market demand is the horizontal sum of these curves.
To concentrate on the essentials, imagine that there are just two buyers of gasoline in the economy. A has a bigger car than B, so his demand is greater. To simplify, let the two demands have
the same intercept on the vertical axis. The curves 
and
indicate how much gasoline A and B, respectively, will buy at each
price. The market demand indicates how much they buy together at any price. Accordingly, at 
, A and B purchase the quantities 
and 
respectively. At a price 
, they purchase 
and 
. The market demand is therefore the horizontal sum of the individual demands at these prices. In the figure this is defined by D
market .
Market demand: the horizontal sum of individual demands.
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