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Question
Does a demand curve always have a negative slope? Give three reasons to justify your answer.
Solution
A demand curve generally has a negative slope indicating the inverse relationship between price and quantity demanded. However, the demand curve may be upward sloping under certain circumstances.
For example:
- Giffen goods have an upward sloping demand curve. They have positive relationship between price and quantity demanded.
- Similarly, a prestige good also has an upward sloping quantity demanded. Prestige goods are demanded more at higher price.
- Consumers may buy more of a commodity even at higher prices when they have fear of a shortage of that commodity in future.
RELATED QUESTIONS
The demand curve is generally ______.
The market demand curve is a ______ summation of all Individual demand curves:
What does the graph below indicate?
Assertion (A): If the income of a consumer increases, other things constant, the demand curve for a normal goods shifts to the right.
Reason (R): As income increases, the demand curve for an inferior good shifts to the left.
Assertion (A): Demand curve is downward sloping.
Reason (R): Demand curve slopes downwards from left to the right because price and quantity demanded are inversely related.
Draw a neat labelled diagram of a demand curve.
Explain the following diagram:
Give two reasons for the shift of the demand curve towards the left.
Give two reasons for the shift of the demand curve towards the right.
Draw a demand curve on the basis of the following data.
| Price per unit (₹) | 2 | 3 | 4 | 5 | 6 | 7 |
| Quantity demanded (Units) | 1000 | 800 | 700 | 600 | 500 | 200 |
