Multiple Choice
Which of the following best describes the demand curve perceived by a perfectly competitive firm?
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3. The Market Forces of Supply and Demand
The Demand Curve
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
A demand curve shows the relationship between:
A
the price of a good and the quantity demanded
B
the price of a good and the quantity supplied
C
consumer income and the quantity demanded
D
the cost of production and the quantity demanded
Verified step by step guidance1
Understand that a demand curve graphically represents how much of a good consumers are willing and able to purchase at different prices.
Recall that the demand curve plots the relationship between the price of the good (on the vertical axis) and the quantity demanded (on the horizontal axis).
Recognize that the demand curve does not directly show the relationship between price and quantity supplied, consumer income and quantity demanded, or cost of production and quantity demanded.
Identify that the correct relationship depicted by the demand curve is between the price of a good and the quantity demanded.
Therefore, the demand curve illustrates how changes in the price of a good affect the quantity that consumers want to buy.
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