Which statement about the demand and supply curves is true?

• A. The demand curve typically slopes upward, indicating that as price increases, quantity demanded increases.
• B. The supply curve typically slopes downward, indicating that as price decreases, quantity supplied increases.
• C. The demand curve typically slopes downward, indicating that as price decreases, quantity demanded increases.
• D. Both the demand and supply curves are always horizontal.

Answer: (C)

Verified step by step guidance

1. Recall the basic law of demand: the demand curve typically slopes downward, which means that as the price of a good decreases, the quantity demanded increases. This reflects consumers' tendency to buy more when prices are lower.
2. Recall the basic law of supply: the supply curve typically slopes upward, meaning that as the price of a good increases, the quantity supplied increases. Producers are willing to supply more at higher prices because it becomes more profitable.
3. Analyze each statement given in the problem by comparing it to these fundamental laws:
4. Identify that the statement 'The demand curve typically slopes downward, indicating that as price decreases, quantity demanded increases' aligns with the law of demand and is therefore true.
5. Recognize that the other statements contradict these laws (e.g., demand curve sloping upward or supply curve sloping downward) and are false.