A demand curve for a normal good
A) slopes upward and to the right.
B) is constructed based on the assumption that income is rising.
C) is constructed based on the assumption that an inverse relationship exists between price and income.
D) shows the inverse relationship between price and quantity demanded.

Question

Quizplus · Accepted Answer

A demand curve for a normal good shows the inverse relationship between price and quantity demanded. As the price of a good increases, the quantity demanded decreases. This is because as the price of a good increases, it becomes relatively more expensive compared to other goods, so consumers are less willing and able to buy it. This relationship is reflected in a downward-sloping demand curve. Additionally, a normal good is one for which demand increases as income increases, so changes in income can shift the entire demand curve either to the right (if income increases) or to the left (if income decreases).

A Demand Curve for a Normal Good