A decrease in the price of a good is illustrated on a demand graph as a movement down along the demand curve. Since the demand curve generally slopes downward from left to right, a price decrease corresponds to moving to a point on the curve with a higher quantity demanded. This movement reflects the law of demand, which states that a lower price results in higher quantity demanded, holding all else constant. The price is shown on the vertical axis and quantity demanded on the horizontal axis. When the price drops, the point moves down vertically to a lower price level and horizontally to a greater quantity demanded along the same demand curve, without shifting the curve itself. This is called a movement along the demand curve, not a shift of the curve.
In summary:
- The demand curve slopes downward from left to right.
- A decrease in price causes a movement down along this curve.
- Quantity demanded increases as price decreases, indicated by moving rightward on the horizontal axis.
This graphically explains and illustrates how a lower price leads to higher demand quantity according to standard economic theory.
