In economics, a demand curve is a model that shows the inverse relationship between the price of a good or service and the quantity of that good or service demanded by buyers in the marketplace. A movement along the demand curve for a good or service is caused by a change in the price of that good or service.Continue Reading
A demand curve represents the rational economic behavior of buyers in a market. As the price of a good or service falls, there is a rightward movement along the demand curve to show an increase in the quantity of the good or service demanded. Conversely, as the price rises, there is a leftward movement along the demand curve to show a decrease in the quantity demanded.
Movements along the demand curve are not equivalent to shifts of the demand curve. Shifts of the demand curve are produced by any event, excluding a change in price, that causes the quantity of a good or service demanded by buyers in the marketplace to increase or decrease.
For example, if strawberries were suddenly found to have vast cancer prevention qualities, more strawberries would likely be demanded at any given market price after the news announcement. In economics, this change in buyer behavior is understood as a shift of the demand curve and not a movement along the demand curve.Learn more about Business Resources