What does a downward-sloping demand curve indicate?

A downward-sloping demand curve indicates that as the price of a good or service decreases, the quantity demanded by consumers increases. This relationship between price and quantity demanded is fundamental to the law of demand, which states that, all else being equal, there is an inverse relationship between price and quantity demanded.

In practical terms, when consumers see a lower price for a product, they are more likely to purchase more of it, as it becomes more affordable. This can be attributed to two primary effects: the substitution effect, where consumers might substitute a more expensive good for a cheaper one, and the income effect, where a price decrease effectively increases consumers' purchasing power.

The other statements do not accurately reflect the principle of demand. For instance, higher prices leading to higher quantity demanded contradicts the basic premise of the law of demand, and a direct relationship between price and quantity demanded suggests that they move in the same direction, which is not the case for a downward-sloping demand curve. Lastly, the statement about quantity supplied remaining constant regardless of price is related to supply rather than demand and does not pertain to the characteristics of a demand curve.