The market demand curve and the normal curve are different in several different ways. The shape of the demand curve, its purpose and the function that defines it are all different from that of the normal curve. Companies also use the demand curve and normal curve in different areas of business operations.
The market demand curve is a function that calculates the estimated demand for a product based on the product's hypothetical price. The normal curve, on the other hand, is a family of symmetric curves based on the normal distribution function. The specific dimensions of each normal curve depend on the value of the mean, and the standard deviation. The standard deviation is a measure of variability among the values on the curve, while the mean is the curve's average.
The shape of a typical market demand curve and the shape of a normal curve are dramatically different. The shape of the demand curve is usually a downward slope with a slight curve. The shape of the normal curve, on the other hand, resembles a bell with the highest point in the middle of the curve and a symmetric slope on both sides. While the demand curve continuously decreases, the normal curve first increases and then decreases.
While businesses use demand curves in the areas of production and price determination, they use normal curves in business administration. Businesses typically use the market demand curve to determine the most advantageous selling price for a particular product. To accomplish this, the business analyzes the demand curve to determine the point at which the demand and price for the product create the largest amount of profit. Conversely, a business may use normal curves to evaluate employee performances, asset portfolios or process variations.
Though they both follow a general pattern of appearance, the exact shape and graphical location of the normal curve and demand curve depend on the situation a business is using them to describe. For example, a normal curve a business is using to describe its assets will differ in height and from a normal curve that the business is using for employee performance evaluation. Likewise, a demand curve a business is using to determine an appropriate price for shoes will be different from a demand curve it uses to price exercise equipment.