Question

Demand curve represents the relationship between the quantity demanded of a good and its __________.

a) Market supply
b) Market demand
c) Price
d) Quantity supplied

Answer 1

The demand curve represents the relationship between the quantity demanded of a good and its price, as illustrated by a downward-sloping line on a graph. This relationship follows the law of demand, which states that higher prices lead to lower quantity demanded, and vice versa.

Step-by-step explanation:

The demand curve represents the relationship between the quantity demanded of a good and its price. When graphed, the demand curve typically slopes downward from left to right, indicating that as the price of a good increases, the quantity demanded decreases, and conversely, as the price decreases, the quantity demanded increases. This inverse relationship is a central concept in economics and is known as the law of demand.

According to the law of demand, consumers will generally purchase more of a good as its price falls and less of a good as its price rises, ceteris paribus (all else being equal). A demand schedule can be used to create a demand curve by plotting the various prices and corresponding quantity demanded. It's important to note that the demand curve reflects the willingness and ability of consumers to purchase a product at various price points, assuming no other factors are changing.

Answer 2

The demand curve illustrates the relationship between the quantity demanded of a good and its price, which is inversely related as per the law of demand.

Step-by-step explanation:

The demand curve represents the relationship between the quantity demanded of a good and its price. The correct answer to the student's question is c) Price. The law of demand states that, ceteris paribus, or other things being equal, a higher price for a good or service will typically result in a lower quantity demanded by consumers. This inverse relationship is graphically represented by a downward sloping demand curve on a graph where the quantity demanded is plotted on the horizontal axis and the price is plotted on the vertical axis.

The concept of price elasticity of demand measures how the quantity demanded changes in response to a change in price. A steeper curve indicates less elasticity (changes in price have a smaller effect on quantity demanded), while a flatter curve indicates more elasticity (changes in price have a larger effect on quantity demanded).