The Demand Curve

By Jodi Beggs, About.com Guide

In reality, however, economists are pretty much limited to two-dimensional diagrams, so they have to choose one determinant of demand to graph against quantity demanded. Luckily, economists generally agree that price is the most fundamental determinant of demand. (In other words, price is likely the most important thing that people consider when they are deciding whether they can and want to buy something.) Therefore, the demand curve shows the relationship between price and quantity demanded.

In mathematics, the quantity on the y-axis (vertical axis) is referred to as the dependent variable and the quantity on the x-axis is referred to as the independent variable. However, the placement of price and quantity on the axes is somewhat arbitrary, and it should not be inferred that either of them is a dependent variable in a strict sense.

This site uses the convention that a lowercase q is used to denote individual demand and an uppercase Q is used to denote market demand. This convention isn’t universally followed, so it’s important to always check whether you are looking at individual or market demand. (You will be looking at market demand in most cases.)

Previous

• Factors That Influence Demand
• The Demand Curve Plots Price vs. Quantity Demanded
• The Demand Curve
• The Demand Curve
• The Slope of the Demand Curve
• A Change in Quantity Demanded
• The Demand Curve Equation

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