Demand Curve
The demand curve is a graphical representation showing the quantity of a good or service that consumers are willing to purchase at different price levels. Typically, the demand curve slopes downwards to the right, indicating that the lower the price, the higher the quantity purchased by consumers.
Definition: A demand curve is a graphical representation of the quantity of a good or service that consumers are willing to purchase at different price levels. Typically, the demand curve slopes downward to the right, indicating that lower prices lead to higher quantities demanded.
Origin: The concept of the demand curve originated with 19th-century economist Alfred Marshall, who systematically introduced it in his 1890 book, 'Principles of Economics.' Marshall used graphical methods to illustrate the relationship between price and quantity demanded, a technique still widely used today.
Categories and Characteristics: Demand curves can be categorized into individual demand curves and market demand curves. An individual demand curve represents the purchasing behavior of a single consumer at various price levels, while a market demand curve is the aggregate of all individual demand curves. Key characteristics of demand curves include: 1. Downward slope to the right, indicating an inverse relationship between price and quantity demanded; 2. The slope of the demand curve reflects price elasticity of demand, which measures the responsiveness of quantity demanded to price changes.
Specific Cases: Case 1: Suppose the price of apples in a city drops from 10 yuan per kilogram to 5 yuan per kilogram, resulting in an increase in demand from 1,000 kilograms to 2,000 kilograms. This demand curve slopes downward to the right, showing that a price decrease leads to an increase in quantity demanded. Case 2: During a promotional event, an electronics store reduces the price of a smartphone from 3,000 yuan to 2,500 yuan, leading to an increase in sales from 500 units to 800 units. This is another typical demand curve, demonstrating the positive impact of a price decrease on quantity demanded.
Common Questions: 1. Why do demand curves typically slope downward to the right? Answer: Because lower prices generally increase consumers' willingness to purchase, thereby increasing the quantity demanded. 2. Do demand curves always slope downward to the right? Answer: Not necessarily. In some special cases, such as Giffen goods, the demand curve may slope upward to the right, meaning that higher prices lead to an increase in quantity demanded.
