In a standard demand curve for a good, what do points on the demand curve represent?

• A. The equilibrium outcomes where quantity demanded equals quantity supplied at every price.
• B. Different combinations of price and quantity supplied, showing how much firms are willing and able to sell at each price.
• C. A shift in demand caused by a change in income, tastes, or the prices of related goods.
• D. Different combinations of price and quantity demanded, showing how much consumers are willing and able to buy at each price (all else equal).

Answer: (D)

Verified step by step guidance

1. Understand that a demand curve graphically represents the relationship between the price of a good and the quantity demanded by consumers.
2. Recognize that each point on the demand curve corresponds to a specific price and the quantity consumers are willing and able to purchase at that price, holding all other factors constant (ceteris paribus).
3. Note that the demand curve does not represent equilibrium outcomes, which occur where demand equals supply, but rather the demand side alone.
4. Distinguish between movements along the demand curve (changes in quantity demanded due to price changes) and shifts of the demand curve (caused by changes in income, tastes, or prices of related goods).
5. Conclude that points on the demand curve show different combinations of price and quantity demanded, illustrating consumer behavior at various prices.