Question

Which of the following is true of a market demand curve?

a. It is derived by the vertical summation of individual demand curves of all consumers in the market.
b. It shows the total quantity demanded over a period of time at various price levels by a consumer.
c. It is derived by the horizontal summation of individual demand curves of all consumers in the market.
d. Unlike individual demand curves, it is positively sloped.

Answer 1

The market demand curve is created by horizontally summing individual demand curves and slopes downward from left to right, embodying the law of demand.

Step-by-step explanation:

The correct answer to the question "Which of the following is true of a market demand curve?" is c. It is derived by the horizontal summation of individual demand curves of all consumers in the market. This means that to find the total demand for a product at each price point, we take the quantity demanded by each consumer at that price and add them together across the entire market to get the market demand at that price.

The market demand curve, like individual demand curves, slopes down from left to right, reflecting the law of demand which states that as the price increases, the quantity demanded decreases, and conversely, as the price decreases, the quantity demanded increases. This downward slope indicates that the market demand curve is, in fact, negatively sloped, which contradicts the statement that market demand curves are positively sloped.