ABSTRACT
The most important property of the demand curve is the negative relation between price and quantity. Measuring quantity and price in pounds instead of tons would significantly raise the slope even though the basic relation between price and quantity has not changed. A model of irrational behavior by households is developed to show that the basic demand relations are derived fundamentally from scarcity alone rather than from an assumption that behavior is "rational." The world demand for oil was in the headlines in 1967 when the Suez Canal was closed. The elasticity is defined at each point on a demand curve and may be quite different at different points even on the same curve. The quantity becomes positive after income exceeds a certain level, eventually increases at decreasing rates, and may even begin to decline when income becomes sufficiently high. Some behavior principles imply positively inclined demand curves even at the market level.
