What is a demand curve?

A demand curve is an economic model that is used to illustrate the demand that consumers have for a certain good at different prices. The two axes are price of the good on the y-axis and quantity demanded of the good on the x-axis. A typical demand curve is downward sloping, because as the price of a good increases, less people can afford the good so less of it is demanded (which is known as the income effect), and more people decide to buy alternate but similar goods instead of the more expensive good (which is known as the substitution effect).

Related Economics A Level answers

All answers ▸

What is meant by an oligopoly being both interdependent and uncertain in their price strategies?


Why does a firm with a monopoly set price to be equal to marginal cost?


Assume the market for Easter rabbits is currently at long term equilibrium. Assume Australia is the largest supplier of easter rabbits. A sudden explosion in the rabbit population of Australia leading up to Easter. How will the market react?


How would a reduction in interest rates lead to an increase in Economic Growth?