What does a demand curve represent?

A demand curve represents the relationship between the price of a good or service and the quantity of it that consumers are willing to purchase at various price levels. Specifically, it illustrates how much of a product consumers want to buy when prices change, reflecting their willingness to pay.

As prices decrease, the quantity demanded typically increases, demonstrating the law of demand. Individuals will be inclined to buy more of a good as it becomes cheaper, which shapes the downward-sloping nature of the demand curve. Conversely, as the price increases, the quantity demanded generally decreases. This graphical representation helps economists visualize consumer behavior in response to price changes and is fundamental in analyzing market dynamics.

Other options might misinterpret the function of a demand curve. For instance, consumer surplus measures the benefit consumers receive when they pay less than what they are willing to pay, while the quantity supplied pertains to producers' willingness to sell at various prices, which is not illustrated by the demand curve. Total revenue relates to the total income generated from sales but does not directly reflect consumer purchasing behavior linked to price variations. Thus, the primary purpose of the demand curve is to convey consumer willingness to buy at different price points.