Which of the following statements can be inferred from at least one of the graphs shown in a typical microeconomics graphing review?

• A. A supply curve that shifts leftward represents an increase in supply.
• B. A perfectly inelastic supply curve is horizontal.
• C. An upward-sloping demand curve shows the law of demand.
• D. A downward-sloping demand curve indicates that as price decreases, quantity demanded increases.

Answer: (D)

Verified step by step guidance

1. Recall the basic shapes and directions of supply and demand curves in microeconomics: the supply curve typically slopes upward, and the demand curve typically slopes downward.
2. Understand what a leftward shift in the supply curve means: a leftward shift indicates a decrease in supply, not an increase, because at every price, less quantity is supplied.
3. Review the characteristics of perfectly inelastic supply: a perfectly inelastic supply curve is vertical, meaning quantity supplied does not change regardless of price, not horizontal.
4. Recall the law of demand: it states that as price decreases, quantity demanded increases, which is represented by a downward-sloping demand curve, not an upward-sloping one.
5. Conclude that the correct inference from typical microeconomics graphs is that a downward-sloping demand curve indicates the inverse relationship between price and quantity demanded, consistent with the law of demand.