A downward sloping demand curve means that

Analyze the question: A downward sloping demand curve slopes from the top left to the bottom right. We need to identify what this tells us about the relationship between price and quantity demanded.

Explain the concept: The Law of Demand says that, other things being equal (ceteris paribus), the higher the price of a good, the lower the quantity demanded, and the lower the price, the higher the quantity demanded. Price and quantity demanded move in opposite directions, which is why the curve slopes downward.

Solution, checking each option:

• A. Price must be lowered to sell more: Correct. Moving down the curve means a lower price corresponds to a larger quantity demanded. So if a seller wants to sell more units, the price has to fall.
• B. Total revenue declines as price is lowered: Incorrect. Total revenue depends on the price elasticity of demand. If demand is elastic, lowering the price actually increases total revenue. The slope alone doesn't tell us this.
• C. Demand falls as output increases: Incorrect. This confuses a change in quantity demanded (movement along the curve) with a change in demand (shift of the curve). Also, output is a supply-side idea.
• D. Demand falls as output falls: Incorrect, for similar reasons. It doesn't describe the price-quantity relationship shown by the curve.

Answer: The correct option is A.

Exam tip: Whenever you see "downward sloping demand curve," think "inverse relationship between price and quantity demanded." Also remember the difference between the two terms: a change in price causes a movement along the curve (change in quantity demanded), while a change in income, tastes, or prices of other goods shifts the curve (change in demand). JAMB loves testing this distinction.