A downward sloping demand curve means that

1. Analyze the question The question asks what a downward sloping demand curve means. This is about the basic law of demand.

2. Explain the concept The law of demand says that, other things being equal (ceteris paribus), when the price of a good falls, the quantity demanded rises, and when the price rises, the quantity demanded falls. Price and quantity demanded move in opposite directions, so the demand curve slopes downward from left to right.

3. Evaluate each option

• A. Total revenue declines as price is lowered. This is not always true. Total revenue depends on price elasticity of demand. If demand is elastic, lowering the price increases revenue. So this is not what a downward slope means.
• B. Demand falls as output increases. This confuses demand with supply or output. A movement along the demand curve changes quantity demanded, not demand, and the slope says nothing about output.
• C. Demand falls as output falls. This is also incorrect for the same reason. It has no link to the slope of the demand curve.
• D. Price must be lowered to sell more. This is correct. Moving down the curve, a lower price corresponds to a larger quantity demanded. So a seller who wants to sell more units must reduce the price.

4. Answer

5. Exam tip Remember that a downward sloping demand curve means price and quantity demanded are inversely related. Also keep these terms apart:

• A change in quantity demanded is a movement along the curve, caused by a price change.
• A change in demand is a shift of the whole curve, caused by income, tastes, prices of related goods and so on.

Options that mix up "demand" with "output" are usually distractors.