Which statement best describes the demand curve for most goods and services?

• A. It is a vertical line, showing that quantity demanded does not change with price.
• B. It is a horizontal line, showing that price does not change with quantity demanded.
• C. It slopes downward from left to right, indicating that as price decreases, quantity demanded increases.
• D. It slopes upward from left to right, indicating that as price increases, quantity demanded increases.

Answer: (C)

Verified step by step guidance

1. Understand that the demand curve represents the relationship between the price of a good or service and the quantity demanded by consumers.
2. Recall the Law of Demand, which states that, ceteris paribus (all else equal), when the price of a good decreases, the quantity demanded increases, and vice versa.
3. Recognize that this inverse relationship between price and quantity demanded is graphically represented by a demand curve that slopes downward from left to right.
4. Eliminate options that describe a vertical demand curve (which implies quantity demanded does not change with price) and a horizontal demand curve (which implies price does not change with quantity demanded), as these do not reflect typical consumer behavior.
5. Also eliminate the option describing an upward sloping demand curve, which contradicts the Law of Demand, and confirm that the correct description is a downward sloping demand curve indicating that as price decreases, quantity demanded increases.