The concept of curve it can refer to a line that enables the development of the graphic representation of a magnitude according to the values that one of its variables takes. In the field of economics, on the other hand, the idea of demand it is linked to the quality and quantity of services and goods that can be bought by consumers in the market.
The demand curveIn this framework, it is the line that graphs the mathematical link between the maximum quantity of a certain good that a consumer would be willing to purchase and his price. This relationship is based on various assumptions, such as the infinite divisibility of goods and the perfect rationality of consumers.
These last two assumptions, together with others on which both the demand curve and its properties depend, have given rise to negative criticism since their emergence. Despite this, even with the limitations that can arise from these abstractions, this curve is really useful to understand the behaviour of the markets from a qualitative point of view, and may prove to be an empirically adequate description.
Beyond being a theoretical construction, the demand curve is used for the market analysis, usually in conjunction with the so-called supply curve (determined by the quantity of a product that a company is willing to sell at a certain price). The point where the demand curve intersects the supply curve marks the Balance From the market.
Both curves represent an analysis tool of great importance in the field of economy neoclassical to predict the trend of prices. It is known as neoclassical economics to a concept that is used to refer to an approach that seeks the integration of certain perceptions from classical to marginalist analysis, a school of thought that emerged in the mid-1800s.
To draw the demand curve, only the price of the good in question. The rest of the variables, such as the price of other goods and the consumer’s income, were considered constant. In this way, the demand curve reveals the changes in quantity demanded as a function of price.
As usual, the higher the price, the lower the demand: That is why the demand curve tends to have a downward trajectory. This situation could be modified if other variables, such as the perspective on the future price, the increase in the population that demands the good, changes in wages and changes in preferences.
Speaking in purely mathematical terms, the demand curve of a market or a consumer who owns a quantity n of products or goods is a hypersurface with a dimension n in a space that is defined as R raised to 2n + 1. It is known as hypersurface, in the field of mathematics, to a variety n-dimensional, being n greater than 2; in other words, it is a geometric object created to generalize a surface from two dimensions to more, as is the case with the hyperplane and the notion of a plane.
If the demand curve moves to the right, it represents an increase in demand that occurs because a factor other than price has changed; if he displacement takes place to the left, on the other hand, it means that the demand has decreased, due to a variation that does not involve the price either.
Among the possible causes of these displacements are changes in the prospects for future prices, the growth of the population that demands the good in question and the variations in the preferences of potential consumers.
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