The law of demand states

• A. Demand curves slope downward
• B. Demand curves slope upward
• C. Demand curves are vertical
• D. Demand curves are horizontal

Answer: (A)

Prices and quantity demanded move in opposite directions. When price falls, more of the good is bought; when price rises, less is bought. This inverse relationship is why the demand curve is drawn as downward-sloping on a price-quantity graph. The downward slope reflects the substitution effect (cheaper price makes the good more attractive relative to alternatives) and the income effect (lower price increases real purchasing power).

An upward-sloping curve would imply people buy more as price rises, which only happens in unusual cases like some Veblen or Giffen situations and isn’t the typical pattern. A vertical curve would mean quantity demanded doesn’t change with price (perfectly inelastic), and a horizontal curve would mean quantity demanded changes without bound in response to price (perfectly elastic).