Question

"other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." this relationship between price and quantity demanded

a. is referred to as the law of demand.
b. applies to most goods in the economy.
c. is represented by a downward-sloping demand curve.
d. all of the above are correct.

Answer 1

The relationship between price and quantity demanded is referred to as the law of demand, which states that when the price of a good rises, the quantity demanded falls, and when the price falls, the quantity demanded rises.

Step-by-step explanation:

The relationship between price and quantity demanded, where the quantity demanded falls when the price of a good rises and the quantity demanded rises when the price falls, is referred to as the law of demand. This law applies to most goods in the economy and is represented by a downward-sloping demand curve. When the price of a good increases, consumers tend to purchase less of it because the higher price makes the good relatively more expensive compared to other goods. On the other hand, when the price decreases, the good becomes relatively cheaper, leading to an increase in quantity demanded.

Answer 2

D.

The law of demand is simple and most goods are indeed like that. The exceptions are Veblen goods and such, where when price increases, demand somehow increases. This reflects the strength of consumer perception.