Quantity demanded is the total amount per period of a given commodity that households collectively are willing to purchase. Note that this is a desired rather than an actual purchase. Variables that affect quantity demanded of butter, for example, include:

1. The price of butter (P);
2. Price of margarine, (P_subs), since margarine is a substitute for butter;
3. Price of bread, (P_comp) since bread is a complement to butter;
4. Average household income, (I_avg);
5. Population size (N);
6. The distribution of income among households;
7. Societal tastes (or preferences).

The quantity demanded of butter for specific values of these variables is given by a demand function:

A graphical representation of this function with fixed values of all variables other than own price is called a demand curve:

This curve shows the quantity demanded, Q_d at specific prices P, ceteris paribus.

If the price of butter falls and all other variables remain constant, then butter becomes less expensive relative to substitutes such as margarine. Consequently, households will tend to increase their quantity demanded of butter (and reduce their quantity demanded of margarine).

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