One reason for the ________ slope of the demand curve is that as prices fall ________.
A)upward; people expect goods to be of lower quality.
B)upward; more people purchase the good.
C)downward; more people find that the price is less than their reservation price.
D)downward; fewer people find that the price equals their reservation price.

Question

Quizplus · Accepted Answer

The downward slope of the demand curve is due to the law of demand, which states that as prices fall, more people are willing and able to purchase the good. This occurs because at lower prices, more people find that the price is less than their reservation price, which is the highest price they are willing to pay for a good. Therefore, choice C is the correct answer. Choices A and B are incorrect, as they describe an upward slope of the demand curve, which does not align with the law of demand. And choice D is incorrect, as fewer people finding that the price equals their reservation price would result in a shifting of the demand curve, rather than a change in slope.

One Reason for the ________ Slope of the Demand Curve