Which of the following is true about the demand curve?

• A. It represents the relationship between price and quantity supplied.
• B. It typically slopes upward, indicating that as price increases, quantity demanded increases.
• C. It is always a vertical line, showing that quantity demanded does not change with price.
• D. It typically slopes downward, indicating that as price decreases, quantity demanded increases.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the definition of a demand curve. The demand curve shows the relationship between the price of a good and the quantity demanded by consumers.
2. Step 2: Recall the Law of Demand, which states that, ceteris paribus (all else equal), as the price of a good decreases, the quantity demanded increases, and vice versa.
3. Step 3: Recognize that this inverse relationship between price and quantity demanded means the demand curve typically slopes downward from left to right.
4. Step 4: Contrast this with the supply curve, which usually slopes upward, indicating that as price increases, quantity supplied increases.
5. Step 5: Note that a vertical demand curve would imply quantity demanded does not change with price, which is not generally true except in special cases (perfectly inelastic demand). Therefore, the correct statement is that the demand curve typically slopes downward.