The demand curve shows how much of a good people are willing to buy at different prices. (See Alex Tabarrok, reference below and video to right.)
Tyler Cowen (reference below and video below) elaborates with a slightly longer definition:
“A demand curve is a function that shows the quantity demanded at different prices. The quantity demanded is the quantity that buyers are willing (and able) to purchase at a particular price.”
He notes that one can read demand curves either horizontally or vertically, depending on the problem to be analyzed, as illustrated below:
MRU practice questions
- When the price of a good increases the quantity demanded ____.
- Your roommate just bought an iPod for $200. She would have been willing to pay $500 for a machine that could store and replay that much music. How much consumer surplus does your roommate enjoy from the iPod?
Alex Tabarrok, The Demand Curve, Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/demand-curve-shifts-definition, accessed 19 April 2016.
Tyler Cowen, A Deeper Look at the Demand Curve, Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/demand-curve-consumer-surplus-definition, accessed 19 April 2016.
Atlas topic and subject
Page created by: Ian Clark, last modified on 20 April 2016.
Image: Minute 0.14 of MRU Video, at http://www.mruniversity.com/courses/principles-economics-microeconomics/supply-curve-definition-example, accessed 20 April 2016.