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Demand refers to the willingness and ability of consumers to purchase a product at a specific price and time. The demand curve is graphed with quantity demanded on the x-axis and price on the y-axis, labeled as 'D' for demand. According to the law of demand, as price increases, demand typically decreases for most products. Movements along the demand curve occur due to price changes; a downward movement indicates an extension, while an upward movement indicates a contraction. Shifts in the demand curve result from factors other than price. The video concludes by noting that price elasticity will be discussed in the next tutorial.