This is “The Demand Curve”, section 2.1 from the book Creating Services and Products (v. 1.0). For details on it (including licensing), click here.

For more information on the source of this book, or why it is available for free, please see the project's home page. You can browse or download additional books there. You may also download a PDF copy of this book (14 MB) or just this chapter (925 KB), suitable for printing or most e-readers, or a .zip file containing this book's HTML files (for use in a web browser offline).

Has this book helped you? Consider passing it on:
Creative Commons supports free culture from music to education. Their licenses helped make this book available to you.
DonorsChoose.org helps people like you help teachers fund their classroom projects, from art supplies to books to calculators.

2.1 The Demand Curve

The typical demand curveA linear mathematical formula with quantity or price as the dependent variable. has the price on the y-axis and the quantity demanded on the x-axis and is downward-sloping. A demand curve can be represented as a linear mathematical formula with quantity or price as the dependent variable. A demand curve is a very useful diagram for describing the relationship between the price level and the quantity demanded at each price level. In general, as the price of a product increases, the demand for the good decreases. Similarly, as the price of a product decreases, the demand for the good increases. The next section of the chapter discusses how the demand curve can be used to identify the optimal price and quantity for selling just one version of a product.