Which of the following best describes how a consumer's demand schedule or curve can be derived?

• A. By observing how the quantity demanded changes as the price of the good varies, holding all other factors constant
• B. By measuring the consumer's income at different points in time
• C. By calculating the total revenue at different price levels
• D. By analyzing the supply curve for the same good

Answer: (A)

Verified step by step guidance

1. Understand that a demand schedule or demand curve shows the relationship between the price of a good and the quantity demanded by consumers.
2. Recognize that to derive the demand curve, we need to observe how the quantity demanded changes when the price of the good changes, while keeping other factors (like income, tastes, prices of other goods) constant. This is known as the ceteris paribus condition.
3. Collect data on different prices of the good and the corresponding quantities demanded by consumers at those prices.
4. Plot these price-quantity pairs on a graph, with price on the vertical axis and quantity demanded on the horizontal axis.
5. Connect the points to form the demand curve, which typically slopes downward, reflecting the inverse relationship between price and quantity demanded.