According to a typical demand curve, the higher the price, which of the following is most likely to occur?

• A. The quantity demanded decreases.
• B. The quantity demanded increases.
• C. The demand curve becomes vertical.
• D. The demand curve shifts to the right.

Answer: (A)

Verified step by step guidance

1. Understand the law of demand, which states that, all else equal, when the price of a good increases, the quantity demanded of that good typically decreases.
2. Recognize that a demand curve graphically represents the relationship between price (on the vertical axis) and quantity demanded (on the horizontal axis).
3. Note that movement along the demand curve occurs when the price changes, leading to a change in quantity demanded, not a shift of the demand curve itself.
4. Identify that an increase in price causes a movement upward along the demand curve, resulting in a lower quantity demanded.
5. Conclude that the correct interpretation is that the quantity demanded decreases as the price increases, consistent with the downward-sloping demand curve.