The demand curve shows the amount of goods consumers are willing to buy at each market price.

A linear demand curve can be plotted using the following equation.

**Qd = a – b(P)**

- Q = quantity demand
- a = all factors affecting price other than price (e.g. income, fashion)
- b = slope of the demand curve
- P = Price of the good.

#### Inverse demand equation

The inverse demand equation can also be written as

**P = a -b(Q)**- a = intercept where price is 0
- b = slope of demand curve

**Example**

**Qd = 20 – 2P**

Q | P |

40 | 0 |

38 | 1 |

36 | 2 |

34 | 3 |

32 | 4 |

30 | 5 |

28 | 6 |

26 | 7 |

0 | 20 |

a

### Change in a

In this case, a has increased from 40 to 50.

This means that for the same price, demand is greater. It reflects a shift in the demand curve to the right. This could be due to a rise in consumer income which enables them to buy more goods at each price.

### Change in b

In this case, the equation has changed from Q=40-2P to Q= 40-1P

This means the slope is steeper and looks like this.

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