What is a Demand Curve?

A demand curve is specifically defined as a graphical representation that illustrates the relationship between the price of a good or service and the quantity demanded by consumers at various price points. Typically, it slopes downward from left to right, indicating that as the price decreases, the quantity demanded generally increases, reflecting the law of demand.

The emphasis on "quantity demanded as a function of price" highlights how consumer behavior changes in response to price variations. This relationship is fundamental to understanding market dynamics, consumer choices, and overall demand in an economy. Understanding the demand curve allows economists and businesses to anticipate how changes in price can influence consumer purchasing decisions, which is critical for effective pricing strategies and marketing.