A typical demand curve shows that:

Question

Quizplus · Accepted Answer

A typical demand curve shows that as the price of a good decreases, the quantity demanded of that good increases. In other words, people tend to buy more of a good when its price decreases. This is the law of demand, which is shown by a downward sloping demand curve. Choice A is incorrect because a typical demand curve does not necessarily show the relationship between income and the quantity demanded of a good. Choice C is incorrect because people do not tend to buy more of a good than they really want unless the price is artificially low (below the market equilibrium price). Choice D is incorrect because supply and quantity demanded are separate concepts and are shown by different curves (the supply curve and the demand curve, respectively).

A Typical Demand Curve Shows That