Demand Curve definition

Demand curve shows the quantity demanded at each price. It is based on law of demand which state there is inverse relationship between price of a good and its demand, provided we hold everything else that affect  demand like individual preference constant.

We all have experienced the law of demand in our life. Most common of them is changing oil prices. One thing or other happens in Middle East like Islamic State capturing of Iraq, rebellion in Qatar against oppressive government. All this affect oil supply worldwide as Middle East has major reserve of world oil. Since the demand of oil is inelastic price rises as supply falls

When we combine the demand curve of all individuals for a particular good say Maggie noodles we get an aggregate demand curve which we call market demand curve.

Why is demand curve downward sloping?

Let's understand this with an example. Narendra Modi like Maggie noodles very much. ( a word of warning noodles are harmful for health!). Eat less of them).  Below we draw Modi’s demand schedule which shows quantity demand of the noodles as its price changes.

Demand schedule


Taking price on y axis and quantity of noodles demanded on x axis and mapping the above data on graph we obtain the demand curve.

Demand curve : Look demand curve is downward sloping

Demand curve is downward sloping because as seen in graph lower price increases the demand for good and vice versa.

Demand curve need not to be always downward sloping. It can vertical or horizontal depending upon the elasticity of good . For example demand curve for drug addicts is inelastic even if the price of drugs increases the quantity demanded of drugs will remain same.