In microeconomics, what does a demand curve illustrate?

• A. The relationship between consumer income and the quantity demanded of a good, holding the good's price constant
• B. The relationship between the price of a good and the quantity demanded over a given time period, holding other factors constant
• C. The relationship between the price of a good and the quantity supplied over a given time period, holding other factors constant
• D. The relationship between the number of firms in a market and the market price, holding demand constant

Answer: (B)

Verified step by step guidance

1. Understand that a demand curve represents how much of a good consumers are willing and able to purchase at different prices over a specific time period.
2. Recognize that the demand curve shows the relationship between the price of the good (on the vertical axis) and the quantity demanded (on the horizontal axis).
3. Note that the demand curve assumes other factors affecting demand (such as consumer income, tastes, and prices of related goods) are held constant, which is known as the ceteris paribus condition.
4. Distinguish the demand curve from the supply curve, which relates price to quantity supplied, and from other relationships like consumer income or number of firms, which are not directly illustrated by the demand curve.
5. Summarize that the demand curve illustrates the inverse relationship between price and quantity demanded: as price decreases, quantity demanded generally increases, and vice versa.