Why demand curve is downward sloping? - Biz Stack

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Monday, November 20, 2017

Why demand curve is downward sloping?

Demand curve: A demand curve is a graphical or mathematical diagram that shows the relationship between the price and quantity of a product that consumers are willing to buy.
Analysis: Let, imaginary demand equation Qd = 10 - 2p. In the equation the different value of independent variable p gives different values of different variables. By presenting both values, we can make an imaginary demand schedule.

So, imaginary demand schedule:

Quantity Demand (unit)
Price (Tk.)
Point
8
1
a
6
2
b
4
3
c

From imaginary demand schedule, real price increases 1, 2 & 3, quantity demand decreases 8,6 and 4.By this we get point a b and c.

Drawing imaginary demand carve:
Putting the different prices from imaginary demand schedule in the demand curve, we get

Figure:
Demand Curve.

 
Curve analysis: The y-axis or vertical line represents price at the dependent variable on the x-axis or horizontal line represents the quantity demanded at the independent variable c. When price increases tk. 2 and 3 demand will decrease to 6 and 4 unit and the points are b and a. By connecting the points, the demand curve is formed what is DD. Since price always has a negative effect on the demand curve, it will have a downward slope.


                
    

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