4.2 Demand

4.2 a. The Demand Curve

The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period. ^[5]

Example: if the price of corn rises, consumers will have an incentive to buy less corn and substitute other foods, so the total quantity of corn consumers’ demand will fall. ^[5]

^{Demand Curve [6]}

4.2 b. Market Demand vs Individual Demand

Market demand refers to the overall or average demand of many market participants. Individual demand refers to the demand of a consumer. ^[7]

Example: A consumer’s demand for a product is strongly influenced by her personal income. However, her personal income does not significantly affect market demand. ^[7]

^{Market Demand vs Individual Demand [8]}

4.2 c. Shifts in the Demand Curve

A shift in the demand curve to the left or right represents a change in consumer preferences. A shift to the right indicates that an item has become more commercially desirable and that a larger number will be sold at a given price. A shift to the left is just the opposite, indicating that a marketplace good is less desirable and that fewer items will be sold at a given price. ^[9]

Example: If consumers’ income drops, decreasing their ability to buy corn, demand will shift left. ^[5]

^{Demand Curve Shifts [10]}