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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