Which of the following best describes a market demand curve?

• A. A curve that shows the relationship between the price of a good and the quantity supplied by producers.
• B. A curve that shows the total quantity of a good all consumers in a market are willing and able to buy at each possible price.
• C. A curve that illustrates the maximum price consumers are willing to pay for each unit of a good.
• D. A curve that represents the demand of a single individual for a good at various prices.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of a demand curve. A demand curve graphically represents the relationship between the price of a good and the quantity demanded by consumers.
2. Step 2: Differentiate between individual demand and market demand. Individual demand shows the quantity one consumer is willing to buy at each price, while market demand aggregates this across all consumers.
3. Step 3: Recognize that the market demand curve is derived by horizontally summing the individual demand curves of all consumers in the market at each price level.
4. Step 4: Note that the market demand curve shows the total quantity of a good that all consumers are willing and able to purchase at various prices, reflecting overall market behavior.
5. Step 5: Contrast this with supply curves and willingness to pay curves, which represent different economic relationships, to confirm that the market demand curve specifically relates price to total quantity demanded.