What is the demand curve?

The demand curve illustrates the relationship between the price of a good or service and the quantity demanded by consumers at any given price level. The demand curve has a negative gradient (downward sloping), thus demonstrating an inverse (negative) relationship between price and quantity demanded, as the higher price gets, the less demand there is. The extent to which price affects demand depends upon the price elasticity of the good. If a good is relatively price inelastic (steep gradient) the % change in price will be greater than the % change in quantity demanded, therefore price change affects demand to a lesser extent. If a good is relatively price elastic (flat gradient) then the % change in price will be less the % change in quantity demanded and price change affects demand more notably.