In microeconomics, what does a market demand curve show?

• A. The maximum price consumers are willing to pay for the last unit at each quantity (marginal willingness to pay) for one individual consumer.
• B. The equilibrium price and quantity only, without showing how quantity demanded varies with price.
• C. The quantity that a single firm is willing to supply at each possible price, holding input costs constant.
• D. The total quantity demanded by all consumers in a market at each possible price, holding other factors constant.

Answer: (D)

Verified step by step guidance

1. Understand that a market demand curve represents the relationship between the price of a good and the total quantity demanded by all consumers in the market.
2. Recognize that it aggregates individual consumers' demand curves horizontally, summing the quantities demanded by each consumer at every price level.
3. Note that the market demand curve shows how the total quantity demanded changes as the price changes, holding other factors constant (ceteris paribus).
4. Distinguish the market demand curve from an individual consumer's demand curve, which shows the quantity demanded by one consumer at each price.
5. Remember that the market demand curve does not show supply behavior or equilibrium directly, but it is essential for determining equilibrium when combined with the market supply curve.