67. How is the law of demand graphically demonstrated
Answer: C
The law of demand is graphically demonstrated by a downward-sloping demand curve.
A downward-sloping demand curve illustrates the inverse relationship between price and quantity demanded, which is the essence of the law of demand.
A) A vertical demand curve
A vertical demand curve indicates that quantity demanded does not change regardless of price changes, which contradicts the fundamental principle of the law of demand. This option incorrectly represents demand behavior, as it suggests that consumers will always buy the same amount regardless of price.
B) An upward-sloping demand curve
An upward-sloping demand curve suggests that as the price increases, the quantity demanded also increases, which is contrary to the law of demand. This option misrepresents the expected negative relationship between price and quantity demanded.
C) A downward-sloping demand curve
A downward-sloping demand curve correctly demonstrates the law of demand, showing that as prices fall, the quantity demanded rises, and vice versa. This graphical representation aligns perfectly with the economic principle that consumers tend to buy more at lower prices and less at higher prices.
D) A horizontal demand curve
A horizontal demand curve indicates perfectly elastic demand, where consumers will only purchase at a specific price and none at higher prices. This does not accurately portray the general behavior described by the law of demand, which involves varying quantities demanded at different price points.
Conclusion
The correct representation of the law of demand is a downward-sloping demand curve, as it illustrates the fundamental inverse relationship between price and quantity demanded. Options A, B, and D fail to capture this relationship, making them incorrect in the context of demand theory. Thus, C is definitively the correct choice.