The slope of demand curve is generally:
Options
ANegative
BPositive
CConstant
DZero
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Theory of Demand and SupplyPYQ - Dec 2022Question 37 of 20
All Questions Correct Answer
✅ Option a — Negative
All Options:
- ANegative
- BPositive
- CConstant
- DZero
Detailed Solution & Explanation
To understand the slope of the demand curve, we need to consider the law of demand, which states that as the price of a product increases, the quantity demanded decreases, and vice versa.
• The demand curve is a graphical representation of this relationship between price and quantity demanded.
• The slope of the demand curve represents the change in quantity demanded in response to a change in price.
• According to the law of demand, as the price increases, the quantity demanded decreases, which means that the demand curve slopes downward from left to right.
• This downward slope indicates a negative relationship between price and quantity demanded, which is why the slope of the demand curve is generally negative.
The incorrect options, such as a positive slope, would imply that as the price increases, the quantity demanded also increases, which contradicts the law of demand.
• A constant or zero slope would imply that changes in price have no effect on the quantity demanded, which is not a realistic representation of consumer behavior in most markets.
About This Chapter: Theory of Demand and Supply
Paper
Paper 4: Business Economics
Weightage
10%
Key Topics
Law of Demand/Supply, Elasticity, Consumer Behavior
One of the most important chapters in the entire CA Foundation Economics paper. It covers the Law of Demand, Law of Supply, Elasticity of Demand (Price, Income, and Cross), Consumer Behavior (Cardinal and Ordinal approaches), and the concept of Consumer Surplus. Understanding demand and supply curves and their shifts is essential for grasping market dynamics.
View Official ICAI SyllabusExam Strategy Tip
Master the difference between 'Change in Demand' (shift) and 'Change in Quantity Demanded' (movement). This distinction alone can secure 3-5 marks. Also practice Elasticity numerical calculations.
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More Questions from Theory of Demand and Supply
Identify the factor which generally keeps the price-elasticity of demand for a good low:
Supply is a concept:
Demand for a commodity refers to:
Contraction of demand is the result of:
All but one of the following are assumed to remain the same while drawing the demand curve for a commodity. Which one is it?
Which of the following pairs of goods is an example of substitutes?
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