market demand - sum of individual demands  

• more consumers enter market >> market demand curve shifts more to the right
• factors influence consumer demands >> also affect market demands
• if individual demands are all the same, then market demand is just some multiple of the individual demands

elasticity of demand = (DQ/Q) / (DP/P) = (P/Q) (DQ/DP)  

• inelastic >> demand relatively unresponsive to price changes
  • for goods that people need, willing to pay more for
  • consumers may buy less, but ultimately spend the same or more
• elastic >> demand decreases as price goes up
  • consumers will buy/spend less
• isoelastic >> elasticity of demand stays constant
• point elasticity of demand = (P/Q) (1/slope)
  • instantaneous price elasticity at some point on the demand curve
• arc elasticity = (P_avg/Q_avg) (DQ/DP)
  • elasticity over a range of prices

consumer surplus - difference between what consumer is willing to pay and what consumer actually pays  

• calculated by area between demand curve and market price (triangular shape)

• there will always be consumers willing to pay more than equilibrium market price
• there will always be producers willing to sell for less than equilibrium market price
• as a result, a surplus arises

• price floor changes the amount of surplus
• relatively, it increases the supplier surplus, as compared to before