Definition: A graph showing the relationship between the price of a good and the quantity demanded at each price.
The demand curve slopes downward due to the law of demand. Movements along the curve occur when price changes (changing quantity demanded). Shifts of the entire curve occur when other factors change (income, preferences, related goods
If coffee prices rise, you move up along the demand curve and buy less. If a health study shows coffee prevents disease, the entire demand curve shifts right—at every price, people want more.
Demand curve analysis is tested constantly on AP exams. You must distinguish shifts from movements and identify shift causes.
Category: Microeconomics