The Demand Curve is a graphical representation of the demand that consumers have for a product. It generally is downsloping, with an increase in price causing decreasing quantity demanded, and vice versa. The demand curve can have different slopes depending on its elasticity. The more elastic the curve, the more responsive to price consumers are. Thus, a small decrease in price will cause a huge surge in demand. Some demand curves are not responsive to price. They do not rspond to price changes at all. Instaces of this include heroin for addicts and insulin for diabetes. These products are essential, so no change in price will change demand. Demand curves have no impact on the actual price the product goes for. They only how many items would be sold at a certain price. The equation for elasticity is as follows:


The demand elasticity can be found by taking the quanity % change. This is found bychange in quantity and dividing by the two quanitity values. And then dividing that by the % change in price, which is found in the same manner.
images.jpgA typical demand curve.

This video is of a college economics class that is building a demand curve today.

Question: If consumer income increases what change will this have on demand?