Which concept best summarizes the behavior of many individual buyers in response to incentives in a market?

• A. The demand curve
• B. Market equilibrium
• C. The supply curve
• D. Price elasticity of supply

Answer: (A)

Verified step by step guidance

1. Understand that the question asks about the concept that summarizes how many individual buyers respond to incentives in a market.
2. Recall that individual buyers' behavior in response to price changes is captured by the demand curve, which shows the relationship between price and quantity demanded.
3. Recognize that the demand curve aggregates the behavior of all buyers, illustrating how quantity demanded changes as price changes, reflecting their incentives.
4. Differentiate this from the supply curve, which represents sellers' behavior, and market equilibrium, which is the point where supply equals demand.
5. Note that price elasticity of supply measures responsiveness of quantity supplied to price changes, not buyers' behavior.