Question

u/ultra/courses/ 31481 1/c/outline tion Completion Status QUESTION hat two variables define the Demand Curve? Explain and offer an example. TTT Arial 3(12pt) , T . :-. I-:- 1-1 Path p

Answer 1

The demand curve gives various price quantity combinations. Basically, it shows different quantities of the good that can be purchased at different prices. So one needs two variables to draw a demand curve. They are price and quantity. The demand curve is a downward sloping curve representing the law of demand. Since it is downward sloping we can say that other things remaining equal(ceteris paribus), the quantity demanded of a good is inversely related to its price. For example, please refer to the table below.

Demand schedule for potatoes

Price (Rs. per Kg)	Quantity demanded(kg)
40	1
30	2
20	3

From the data in the table we can infer that a buyer purchases more potatoes when it's price falls establishing the Law of demand. With certain exceptions the demand curve is always negatively sloped. Additionally we can also infer from the table that the price elasticity of demand is 1.5.