Editing Demand curve (section)

==Shape of the demand curve==
In most circumstances the demand curve has a negative slope, and therefore slopes downwards. This is due to the law of demand which conditions that there is an inverse relationship between price and the demand of commodity (good or a service). As price goes up quantity demanded reduces and as price reduces quantity demanded increases. 

For convenience, demand curves are often graphed as straight lines, where ''a'' and ''b'' are parameters:

:<math>Q = a+bP\text{ where }b<0</math>.

The constant ''a''  embodies the effects of all factors other than price that affect demand. If income were to change, for example, the effect of the change would be represented by a change in the value of "a" and be reflected graphically as a shift of the demand curve. The constant ''b'' is the slope of the demand curve and shows how the price of the good affects the quantity demanded.<ref name="Braeutigam 2005">{{cite book |last1=Besanko |last2=Braeutigam |title=Microeconomics |url=https://archive.org/details/microeconomics00besa |url-access=registration |location=Hoboken |publisher=Wiley |year=2005 |isbn=0-471-45769-8 |page=[https://archive.org/details/microeconomics00besa/page/91 91] }}</ref>

The graph of the demand curve uses the [[inverse demand function]] in which price is expressed as a function of quantity. The standard form of the demand equation can be converted to the inverse equation by solving for P:

:<math>P = \frac{Q - a}{b}</math>.<ref name="Braeutigam 2005" />

=== Curvature ===
[[File:Monopoly Demand Curve.png|thumb|Convex demand curve]]
The demand is called ''[[Convex function|convex]]'' (with respect to the [[Origin (mathematics)|origin]]{{sfn|RBB Economics|2014|p=16}}) if the (generally down-sloping) curve bends upwards, ''[[Concave function|concave]]'' otherwise.{{sfn | Malueg | 1994 | p=237}} 

The demand curvature is fundamentally hard to estimate from the empirical data, with some researchers suggesting that demand with high convexity is practically improbable. Demand curve are, however, considered to be generally convex in accordance with [[Marginal utility|diminishing marginal utility]].{{sfn|RBB Economics|2014|p=36}} Theoretically, the Demand curve is equivalent to the [[Price-consumption curve|Price-offer curve]] and can be derived by charting the points of tangency between [[Budget constraint|Budget Lines]] and [[indifference curve|indifference curves]] for all possible prices of the good in question.<ref>Varian, Hal (2014). Intermediate Microeconomics : a Modern Approach (8th ed.). New York: Norton & Company. p.</ref>