Demand Schedule and Demand Curve and Why Demand Curve Slopes Downward to the Right?

Demand schedule is the list of different quantities demanded of a commodity that buyers would purchase at different prices.

The demand curve indicates the different quantities of a commodity at different prices. The graphical representation of the demand schedule is called demand curve. The demand curve simply shows how the quantity purchased varies with the variation in price.

Along OX axis are represented the quantities of the commodity and along OY axis represents the prices. It will be seen that at the price OP, OM quantity is purchased. At OP’ price, ON quantity is purchased and at OP” price. OL Quantity is purchased.

Generally demand curve slopes downwards. When the price falls of the commodity, the demand rises and if the price rises, the demand falls of the commodity. There are three reasons of demand curve to be sloped downward to the right.

1. Law of diminishing marginal utility

2. Income effect

3. Substitute effect

If the price falls, real income of the purchaser increases. When price low of a commodity, less price is spent for previous amount of the commodity and surplus money is spent for additional unit of the commodity. If the price rises, the real income decreases and so on.

Remaining prices unchanged of other commodities, if the price falls of a commodity, demand increases. Because, the goods is cheaper than other goods due to price fall of the commodity.

When a commodity becomes cheaper like water, we shall use it for washing, and other less urgent uses.

1. In future price of a commodity may increase

2. Honour, dignity

3. Gifted goods