Demand schedules can be shown on a graph. As with many graphs in economics, price (P) is placed on the y-axis and quantity demanded (Q) is placed on the x-axis.
P
1.60 1.40 1.20 1.00 0.80 0.60
2 7 12 17 22 27 Q Demand Curve
The demand curve for bottled water. As the price falls, the quantity demanded increases causing movement along the curve. This gives us the downward slope of the curve. Similarly, when the price rises the quantity demanded falls.
Movements along a demand curve Changes in the price of a product causes movement along the demand curve. Price
P2 P1
D 0 Q2 Q1
Quantity Demanded
A rise in price from P1 to P2 causes a fall in demand from Q1 to Q2. Price
P1 P2
D 0 Q1 Q2
Quantity Demanded
A reduction in price from P1 to P2 causes a rise in demand from Q1 to Q2.
Shifts in demand curves Besides price, there are other factors that can cause demand for a product to rise or fall. These changes cause a demand curve to shift to the left or the right.
