Which of the following statements about demand and supply curves is true?

• A. The demand curve typically slopes upward, indicating that as price increases, quantity demanded increases.
• B. The supply curve typically slopes downward, indicating that as price decreases, quantity supplied increases.
• C. Both demand and supply curves are always vertical lines.
• D. The demand curve typically slopes downward, indicating that as price decreases, quantity demanded increases.

Answer: (D)

Verified step by step guidance

1. Recall the basic law of demand: as the price of a good decreases, the quantity demanded generally increases, which means the demand curve slopes downward from left to right.
2. Recall the basic law of supply: as the price of a good increases, the quantity supplied generally increases, which means the supply curve slopes upward from left to right.
3. Understand that a vertical demand or supply curve would imply that quantity demanded or supplied does not change with price, which is not typical in most markets.
4. Evaluate each statement by comparing it to these fundamental principles of demand and supply curves.
5. Identify the true statement as the one that correctly describes the demand curve sloping downward, indicating an inverse relationship between price and quantity demanded.