Demand Curve The demand curve, on the other hand, is a graph that shows the relationship between what a product costs and how much a consumer is willing and able to pay at a given price.

With an inverse demand curve, price becomes a function of quantity demanded. This means that changes in the quantity demanded lead to changes in price levels, which is the inverse of a demand curve.

The utility function can be used to derive the demand function, and both concepts relate to utility maximization.

The law of supply and demand explains how changes in a product's market price relate to its supply and demand. Demand for basic necessities is less responsive.

The aggregate demand and aggregate supply curves depict aggregate demand and aggregate supply as functions of the price level (P).

If business leaders do not understand the demand/capacity curve, company performance could drop quickly as demand increases.