The market demand curve is the horizontal summation of individual demand curves. Individual demand is the key initiator of the production process. It is independent of all factors other than the preference curve, prices and income constraint. The amount of a commodity sellers are willing to produce at each specified price in a given market at a given time. The market supply curve is the horizontal summation of individual firm supply curves.
Supply is identical to the rising section of the marginal cost curve of the firm.
Market Equilibrium Equilibrium in a market is established where the demand curve intersects the supply curve. At this unique price the quantity demanded by consumers clears the quantity supplied by producers. Market equilibrium is stable if any change in the price or quantity calls into action forces reestablishing the initial price-quantity relationship. In the long-run, price is also equal to average cost. The industry, i.e. all producers taken together, faces a negatively sloped demand curve but the individual producer faces a horizontal demand curve, i.e. the firm is a strict price-taker .