67. How is the law of demand graphically demonstrated
Answer: C
A downward-sloping demand curve
The law of demand is graphically demonstrated by a downward-sloping demand curve, which illustrates that as the price of a good decreases, the quantity demanded increases, and vice versa.
A) A vertical demand curve
A vertical demand curve indicates that the quantity demanded does not change regardless of price changes, which contradicts the law of demand. This representation suggests that demand is perfectly inelastic, which is not the case for most goods in a competitive market.
B) An upward-sloping demand curve
An upward-sloping demand curve suggests that as prices increase, the quantity demanded also increases, which directly contradicts the law of demand. The law states that there is an inverse relationship between price and quantity demanded, making this option incorrect.
C) A downward-sloping demand curve
A downward-sloping demand curve accurately reflects the law of demand, demonstrating that lower prices lead to higher quantity demanded. This relationship is fundamental to understanding consumer behavior in economics.
D) A horizontal demand curve
A horizontal demand curve implies that any price change will lead to an infinite change in quantity demanded, indicating perfect elasticity. While this scenario can exist in specific markets, it does not represent the general law of demand, which encompasses a broader range of consumer responses to price changes.
Conclusion
The downward-sloping demand curve is the definitive representation of the law of demand, effectively illustrating the inverse relationship between price and quantity demanded. Other options fail to represent this fundamental principle, either by suggesting no change with price alterations or by indicating a direct relationship, which is inconsistent with established economic theory.