Demand

In economics, demand is the utility for a good or service of an economic agent, relative to his/her income. (Note: This distinguishes "demand" from "quantity demanded", where demand is a listing or graphing of quantity demanded at each possible price. In contrast to demand, quantity demanded is the exact quantity demanded at a certain price. Changing the actual price will change the quantity demanded, but it will not change the demand, because demand is a listing of quantities that would be bought at various prices, not just the actual price.)

Demand is a buyer's willingness and ability to pay a price for a specific quantity of a good or service. Demand refers to how much (quantity) of a product or service is desired by buyers at various prices. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand.[1] (see also supply and demand). The term demand signifies the ability or the willingness to buy a particular commodity at a given point of time.

Why Demand Curve Slopes Downward?

• The Law of Diminishing Marginal Utility or Gossen's First Law

• What does Law of Demand State? And What are the Exceptions to the Law of Demand?

Introduction

A demand curve represents functional relationship between price and quantity. In general, demand curves slope downward from left to right while horizontal axis measures quantity demanded and vertical axis measures price. This denotes that consumers prefer to buy less at a higher price and more at a lower price. But why does it happen? Though buying more at a lower price appears straightforward, there are various economic reasons behind it. The following are the most important reasons for the downward slope of a demand curve:

Law of Diminishing Marginal Utility

Firstly, a demand curve is just an extension of marginal utility curve. According to the law of diminishing marginal utility, a...