Which slope characterizes most demand curves?

Which slope characterizes most demand curves?

• A. Vertical
• B. Horizontal
• C. Downward
• D. Upward

Answer: (C)

Demand shows how quantity demanded changes when price changes, which is shown by the slope of the demand curve. In most cases, the curve bends downward: as price falls, people buy more, and as price rises, they buy less. This downward slope comes from the Law of Demand, driven by the substitution effect (cheaper relative to other goods) and the income effect (the good becomes more affordable, effectively raising purchasing power). Graphically, price is on the vertical axis and quantity demanded on the horizontal axis, so a downward-sloping line reflects higher quantities at lower prices. Exceptions exist—vertical demand means quantity demanded doesn’t change with price (perfectly inelastic), horizontal means quantity demanded is highly responsive (perfectly elastic), and upward-sloping curves are rare and occur only in special cases like some luxury or Giffen/Veblen goods. But for most goods, the slope is downward.

Demand shows how quantity demanded changes when price changes, which is shown by the slope of the demand curve. In most cases, the curve bends downward: as price falls, people buy more, and as price rises, they buy less. This downward slope comes from the Law of Demand, driven by the substitution effect (cheaper relative to other goods) and the income effect (the good becomes more affordable, effectively raising purchasing power).

Graphically, price is on the vertical axis and quantity demanded on the horizontal axis, so a downward-sloping line reflects higher quantities at lower prices. Exceptions exist—vertical demand means quantity demanded doesn’t change with price (perfectly inelastic), horizontal means quantity demanded is highly responsive (perfectly elastic), and upward-sloping curves are rare and occur only in special cases like some luxury or Giffen/Veblen goods. But for most goods, the slope is downward.