Concept: Demand

The demand curve is one of the most important relationships in all of economics. It represents the behavior of buyers in markets. Each demand curve shows the quantity of a well-defined good or service that will be purchased—at various prices—during a particular time period.

For example, the graph shown here depicts the daily demand for hamburgers in a medium-sized city. The price per hamburger is measured on the vertical axis, and the total number purchased is measured on the horizontal axis. This is a market demand curve, so it reflects the behavior of all buyers of hamburgers in this market.

Notice that the demand curve slopes downward from left to right. More burgers are demanded at lower prices than at higher prices. This negative relationship between price and quantity demand illustrates the law of demand: Other things equal, the quantity demanded of a good falls when the price of the good rises.

To see how this works, use the slider bar to change the price. As you do this, you will be simulating a movement along the demand curve. This movement is called a "change in quantity demanded" as a result of a change in price. You should see that a higher price means a smaller quantity demanded, while a lower price means a larger quantity demanded.