What does a typical downward-sloping demand curve demonstrate in microeconomics?

• A. As the price of a good increases, the quantity demanded increases.
• B. As the price of a good decreases, the quantity demanded decreases.
• C. The demand curve shows the relationship between supply and price.
• D. As the price of a good decreases, the quantity demanded increases.

Answer: (D)

Verified step by step guidance

1. Understand that a demand curve in microeconomics represents the relationship between the price of a good and the quantity demanded by consumers.
2. Recognize that a typical demand curve is downward-sloping, which means it slopes from the upper left to the lower right on a graph where price is on the vertical axis and quantity demanded is on the horizontal axis.
3. Interpret the downward slope as indicating an inverse relationship: when the price of a good decreases, consumers are willing and able to buy more of it, so the quantity demanded increases.
4. Conversely, when the price of a good increases, the quantity demanded decreases because the good becomes relatively more expensive, and consumers may substitute it with other goods or reduce consumption.
5. Note that the demand curve does not show the relationship between supply and price; that relationship is depicted by the supply curve.