In economics, the demand curve is the graph depicting the relationship between the price of a certain commodity and the amount of it that consumers are willing and able to purchase at that given price. It is a graphic representation of a demand schedule. The demand curve for all consumers together follows from the demand curve of every individual consumer: the individual demands at each price are added together.
Demand curves are used to estimate behaviors in competitive markets, and are often combined with supply curves to estimate the equilibrium price (the price at which sellers together are willing to sell the same amount as buyers together are willing to buy, also known as market clearing price) and the equilibrium quantity (the amount of that good or service that will be produced and bought without surplus/excess supply or shortage/excess demand) of that market. In a monopolistic market, the demand curve facing the monopolist is simply the market demand curve.
Read more about Demand Curve: Characteristics, Linear Demand Curve, Shift of A Demand Curve, Movement Along A Demand Curve, Discreteness of Amounts, Units of Measurement, Price Elasticity of Demand (PED), Taxes and Subsidies
Famous quotes containing the words demand and/or curve:
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—Henry David Thoreau (1817–1862)
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