Demand Curve

… a core concept in Economic Analysis and Atlas102

Click for MRU video

Click for MRU video

Concept description

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:

Click for MRU video2

Click for MRU video2

“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:

ReadingDemandCurves

MRU practice questions

See http://www.mruniversity.com/demand-curve-shifts-definition-practice-questions and http://www.mruniversity.com/demand-curve-consumer-surplus-definition-practice-questions.

xx

  1. When the price of a good increases the quantity demanded ____.
  2. 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?

Source

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

Supply, Demand, and Equilibrium (core topic) in Economic Analysis.

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.