Each point is the summation of all individual demands of all consumers in the market at that price.
Suppose you only have two consumers, A and B.
At price $1, A demands 2 units and B demands 3 units.
For the market demand curve at price $1 you would have quantity
demanded 5 units. (2 + 3 as there are only two consumers in the
So the market demand curves ends up being the horizontal summation of each individuals quantity demanded at a certain price (You sum quantity demand which is on the x-axis at each price hence horizontal summation)
On average, as price increases quantity demand decreases in the market. This is known as the law of demand. This may not be true for each individual consumer however, it is usually true for the market.
There are certain exceptions to the law of demand:
- Veblen goods. These are luxury goods that become more desirable as their price
- Giffen goods. These are inferior goods that are usually a diet staple
e.g. wheat, rice. If there price goes up people cut on luxury goods
to consume more of these i.e. Irish Famine.