What is Demand Curve?
Demand curve is a curve that is used in microeconomics to determine the quantity of any particular commodity that people are willing to purchase with corresponding changes in its price.
It is represented as the price of the commodity on the y-axis and the quantity demanded on the x-axis in a graph.
What is the Law of Demand?
The law of demand is regarded as one of the most basic concepts that are being studied in the field of economics. It states that keeping all the other factors constant (ceteris paribus), the demanded quantity of a good is shown to exhibit an inverse relationship with the price of the good.
In simple words, with an increase in price, the demand decreases and with a decrease in price, the demand increases. The law of demand is used in conjunction with the law of supply to determine an efficient resource allocation and the optimum quantity and price of goods.
The consumer preference theory helps in understanding the combination of goods that a consumer might prefer, taking into account the budgetary constraints and the price of goods in the market.
The best explanation for this is found in microeconomics using the demand function, where demand functions are derived from the indifference curves.
Also read: Theory of Demand in Economics
This article was about the demand curve and the law of demand. Stay tuned for questions papers, sample papers, syllabus, and relevant notifications on our website.
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