Demand Curve
A graph showing how the demand for a commodity or service varies with changes in its price.
What is demand?
Demand is the amount of a product customers are prepared to buy at different prices. Demand is also based on the ability to pay. If the customer can’t pay for it having no affective demand.
What affects the Demand?
The demand for a good depends on several factors, such as, Income, Seasonality, external economic environment, Advertising and branding and changes in taste and fashion and preference. Learn more on the effecting factors page.
Law of demand
As the price of a product increases the demand for that product will decrease. This is known a inverse law. The same concept works the other way, if the price decreases the demand for the product will increase.
How to draw a graph
On the Y axis is the price (£,$) and on the X axis is the quantity. The line measures the demand curve. The line should always slope down to the right, this is because of law of demand.
If Demand goes up
If demand increases, the demand curve moves to the right and more products and services are sold for the same price. For example, before demand was increased, 80 goods were sold for £12. on D2 now 115 goods are sold for £12
If demand goes down.
If Demand decreases, fewer goods are sold for the same price and the demand curve moves to the left. For example, before demand decreased Q1 goods were sold for P1 but now only Q2 goods are sold for P1.
