What does a demand curve illustrate?

A demand curve illustrates the relationship between price and quantity demanded. This fundamental concept in economics represents how much of a good or service consumers are willing and able to purchase at different price levels. As the price decreases, typically, the quantity demanded increases, reflecting the law of demand which states that there is an inverse relationship between price and quantity demanded, all else being equal.

The demand curve is typically downward sloping, showcasing this relationship graphically. It helps businesses and policymakers understand consumer behavior, make pricing decisions, and evaluate market conditions.

In contrast, the other options focus on different economic concepts. The relationship between price and quantity supplied is represented by the supply curve, not the demand curve. Total cost of production pertains to the expenses associated with producing goods and services, which is not illustrated by a demand curve. Lastly, the level of economic growth refers to the increase in the production of economic goods and services, assessed over time, and is not depicted by a demand curve either. This further reinforces the role of the demand curve as a tool specifically for illustrating demand dynamics in a market.