In a standard demand curve graph with quantity demanded on the horizontal axis, what does the vertical axis of a demand curve show?

• A. Total revenue (e.g., $P\times Q$)
• B. Income of consumers (e.g., $Y$)
• C. The price of the good (e.g., $P$)
• D. The quantity demanded of the good (e.g., $Q$)

Answer: (C)

Verified step by step guidance

1. Recall the standard layout of a demand curve graph in microeconomics, where the horizontal axis represents the quantity demanded of a good, denoted as \(Q\).
2. Understand that the vertical axis in this graph typically represents the price of the good, denoted as \(P\), which is the amount consumers are willing to pay for each unit of the good.
3. Recognize that total revenue, calculated as \(P \times Q\), is not shown directly on either axis but can be derived from the values on the demand curve.
4. Note that the income of consumers, denoted as \(Y\), is an external factor that can shift the demand curve but is not represented on the axes of the demand curve graph.
5. Therefore, the vertical axis of a standard demand curve graph shows the price of the good, \(P\), while the horizontal axis shows the quantity demanded, \(Q\).