Demand Curve Law Of Demand Microeconomics

Demand Curve Law Of Demand Microeconomics Demand Curve is the geometric tool of economics which helps in the exact illustration of inverse relationship between price and demand; i.e. the law of demand. When a demand schedule is plotted on a graph by joining the points, it is called a Demand Curve. In short Demand Curve is a graphical representation of inverse relationship between price and demand. There are two types of Demand Curves: Individual Demand Curve Total Demand Curve The demand curve of an individual buyer shows an individual demand curve where as the sum total of all the individual curves is a total demand curve. In the above diagram DD is Demand Curve, P is original Price, P1 is new price, M is quantity demanded, and M1 is new quantity demanded. The above diagram illustrates the inverse relationship between the price and demand. When the price is equal to OP, then the quantity demanded is equal to OM.As the price falls from OP to OP1, the quantity demanded increase from OM to OM1.Hence there is an increase in quantity demanded as the price falls and vice a versa.