Here's why this convention is used:
* Causality: The law of demand states that price influences the quantity demanded. We generally assume that price is the independent variable (the cause), and quantity demanded is the dependent variable (the effect). By placing price on the y-axis, we visually emphasize this causal relationship.
* Historical Practice: This convention stems from the historical development of economics and the way economists first graphed these relationships. While we could theoretically swap the axes, it would be confusing for anyone who has studied economics previously.
* Clarity: Placing price on the y-axis makes it easier to visualize the negative slope of the demand curve. The downward slope signifies that as price increases, the quantity demanded decreases.
It's important to note that while the convention is to put price on the y-axis, the relationship between price and quantity demanded remains the same regardless of axis placement. The key takeaway is that the demand curve is always downward sloping, representing the inverse relationship between price and quantity demanded.
