Each buyer's individual demand curve comes from the buyer's benefit-cost rule: Buy another unit if its marginal benefit (MB) to you exceeds (or at least covers) the price you pay for it.
 
Consider a product-market example: the demand for donuts:
 
Use the information below to construct a demand curve for the 8 most highly-valued donuts in the diagram to the right:
 

	Maximum price (=MB)
Student	Donut 1	Donut 2
Mark C.	$2.00	$.10
Darren J.	.75	.05
Stephen C.	.75	.02
Emily W.	.50	.00
Eileen C.	.10	.01

 
There are two ways to look at demand:
    (1) Given any price (P), the distance out to the demand curve tells us the quantity demanded (Qd).

	Example:	P=$.60 => Qd = _____
		P=$.10 => Qd = _____

 
    (2) Given any unit, the distance up to the demand curve tells us the maximum demand price for that unit, which equals the unit's marginal benefit (MB).

	Example:	marginal benefit of unit 1 = $_____
		marginal benefit of unit 4 = $_____

 
Key lessons:
    (1) Lurking behind every demand curve are consumer benefits.
    (2) Demand curves always slope down (this is called the "law of demand").
    (3) Price steers consumption of an item to its highest-valued uses.

Looking ahead: The consumer surplus for any unit is the excess of what you are willing to pay (your MB) over what you actually have to pay (the market price).
    If the price is $.10, how much consumer surplus does the buyer of donut 1 enjoy? _____