Why Is the Demand Curve Downward Sloping?
Learn why a demand curve usually slopes downward, how a lower price changes quantity demanded, and why a price change moves along rather than shifts the curve.
The demand curve slopes downward because, when a good’s price falls, people are usually willing and able to buy more of it; when its price rises, they usually buy less. This assumes other factors affecting demand stay the same, an assumption called ceteris paribus.
This is part of the AS Level topic Demand and supply curves, especially the distinction between a movement along a curve and a shift of the curve (2.1.7).
Why does quantity demanded change?
A lower price makes the good cheaper relative to alternatives. Some consumers may switch to it from a substitute. It also means their money can buy more than before, so they may choose to buy more of the good. Together, these effects help explain why a lower price is generally associated with a higher quantity demanded.
For example, suppose the price of a bus journey falls from 101010 to 888 currency units, while fares for other transport stay the same. Some travellers may switch to the bus, increasing the number of journeys demanded. On a graph with price on the vertical axis and quantity on the horizontal axis, this appears as a movement down and to the right along the demand curve.
The common exam mistake
A change in the good’s own price causes a movement along its demand curve, not a shift of the curve. A change in another factor, such as consumer income or the price of a substitute, can shift demand instead. The same movement-versus-shift distinction applies to a supply curve.
A downward-sloping demand curve describes the usual relationship between price and quantity demanded. It does not mean that every change in sales is caused by a change in price.
