What is demand curve?

It is the creation of a demand which is a daunting task. Filling it, however, is comparatively easier. 

Demand curve happens to be a crucial component in the field of economics.  Etymologically speaking, it is a graphical presentation that captures the interest levels of customers pertaining to a particular product. It showcases how far customers are willing to go to get hold of that product.

It actually represents the correlation that exists between a product or a service and the demand for the product in a particular niche market. Experts believe that creating a product and then finding a befitting market is a wrong approach. One should intend to find a suitable market in the first place, analyze its demographical features and needs and then create a particular product to meet the needs of that specific market.

Explaining demand curve

If you have to speak technically, the demand curve is the specific graphical presentation that represents what percentage of target customers are interested in your product. Looking at it, you can actually make a mental map as to how many of them might be instigated enough to patronize your product. Understanding it is pretty much of a mandate for every business house (be it a startup or a renowned one).

Why is understanding demand curve a blessing for businesses?

Proper and enhanced knowledge of demand curve is going to lead you to a better understanding of the competitive market. If you are skilled at understanding demand curves in a lucid manner then you should consider it as a gift. It would help you move ahead of your competitors.

A few crucial aspects related with the demand curve

While understanding demand curve you need to keep your perceptions clear about a few other vital as well as associated aspects. They are

  • Linear demand
  • Market clearing tags of price
  • Equilibrium price
  • Supply curves
  • Competitive markets
  • Marginal utility
  • Demand shifters

Demand curve happens to be a crucial component in the field of economics

A Demand curve is characterized by changes

A Demand curve is always characterized by constant and at times radical changes. You need to understand these changes and their nature pretty well. Some of these changes are

  • Changes which often take place in expectation levels
  • Changes or alterations taking place in the mindset
  • Alterations in composition and population size
  • Alterations in disposable income

What are the major aspects affecting a demand curve?

  • Rapid as well as strategic growth in the price of a particular product
  • Decrease in value or price of a product or service
  • Income of target audience increasing
  • Demographic changes
  • Change or alterations taking place
  • Divergent price points
  • Laws pertaining to the demand which exists in the market


PED means price elasticity pertaining to a product in demand. PED happens to be a sensitive aspect. The astute economists feel or believe that PED stands for absolute value.

The demand curve is and will always remain a deciding factor in terms of the popularity and flourish of a particular product of significance. When you think of demographical features of an interested sect of buyers for a particular product of yours, you need to strategize your thoughts as to how you can make the most out of the demand curve for the product.