A publisher faces the following demand schedule for the next novel from one of its popular authors: At a price of \$30, 10,000 copies are demanded; at \$20, 20,000 copies are demanded; and at \$10, 30,000 copies are demanded. Which of the following statements best describes the shape of the demand curve for this novel?

• A. The demand curve is downward sloping, indicating that quantity demanded increases as price decreases.
• B. The demand curve is vertical, indicating that quantity demanded does not change with price.
• C. The demand curve is horizontal, indicating that price does not change with quantity demanded.
• D. The demand curve is upward sloping, indicating that quantity demanded increases as price increases.

Answer: (A)

Verified step by step guidance

1. Identify the relationship between price and quantity demanded from the given data points: at \$30, quantity demanded is 10,000; at \$20, quantity demanded is 20,000; and at \$10, quantity demanded is 30,000.
2. Observe how quantity demanded changes as price changes. Notice that when price decreases from \$30 to \$20, quantity demanded increases from 10,000 to 20,000, and when price decreases further to \$10, quantity demanded increases to 30,000.
3. Recall the definition of a downward sloping demand curve: it shows an inverse relationship between price and quantity demanded, meaning quantity demanded rises as price falls.
4. Compare this behavior to other types of demand curves: a vertical demand curve means quantity demanded stays the same regardless of price; a horizontal demand curve means price stays the same regardless of quantity; and an upward sloping demand curve means quantity demanded increases as price increases.
5. Conclude that since quantity demanded increases as price decreases in the given data, the demand curve is downward sloping, which is the typical shape for most demand curves.