Demand+Curve-+Generally

The Demand Curve

The Demand curve is defined as the relationship between the price of the good and the amount or quantity the consumer is willing and able to purchase in a specified time period given constant levels of other determinants; such as tastes, income, prices of related goods, expectations, and the number of buyers in the market. Demand curves are used to estimate behaviors in competitive markets and are often combined with supply curves.

The demand curves downward slope from left to right reflects the law of demand; people buy more of a product, service, or resource as its price falls. The demand curve can often be confused to the marginal utility curve since the price is willing to pay depends on the utility but the demand directly depends on the income of an individual while utility does not. An example of a shift in the demand curve would be if there was a positive news report about a certain product, the quantity demanded at each price may increase from left to right. Complements is an increase in the price of a complement reduces demand, shifting the demand curve to the left, a substitute is an increase in the price of a substitute product increases demand, shifting the demand curve tot the right.

Picutre of the Demand curve (yellow line) This clip from the hit show "South Park is a perfect example of the demand curve. It shows that if the prices are low people will buy more because they think that they are getting a really good deal.

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What are they determinants of the demand curve?

Websites: [|Demand Cruve-Wikipedia] [|NetMBA Demand Curve] [|Explorations in Economic Demand]

Answer: consumers tastes, income, price of related goods, expectations about income and prices, and number of buyers in the market.