Demand Curve
Definition
The demand curve illustrates the relationship between the quantity demanded of a good or service and its price. It shows that as prices decrease, consumers are willing to buy more of the good or service.
Analogy
Picture yourself at a clearance sale where prices keep dropping. As prices go down, more and more people join the line to buy the discounted items. Similarly, as prices decrease, consumers are enticed to purchase more of a good or service.
Related terms
Law of Demand: The principle that states there is an inverse relationship between price and quantity demanded.
Shift in Demand Curve: When factors other than price cause changes in the quantity demanded at each price level.
Elasticity of Demand: A measure of how responsive quantity demanded is to changes in price.
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