University of Central Florida (UCF) ECO2013 Principles of Macroeconomics Practice Exam 1

In a demand curve, the price is represented on the vertical axis, which is commonly referred to as the y-axis. This arrangement illustrates the relationship between the price of a good or service and the quantity demanded by consumers. As the price increases, typically the quantity demanded decreases, reflecting the law of demand. Conversely, if the price decreases, the quantity demanded generally increases. This negative slope of the demand curve clearly shows how changes in price can influence consumer behavior.

The x-axis, on the other hand, represents the quantity demanded. Understanding this axis representation is crucial for analyzing how shifts in demand due to factors other than price occur, such as changes in consumer preferences or income. The other axes mentioned, such as z-axis and r-axis, are not used in this context of demand curves, making them irrelevant in the analysis of price and quantity relationships in economics.