Question

The nature of demand indicates that as the price of a good increases:

A. suppliers wish to sell less of it.
B. more of it is produced.
C. more of it is desired.
D. buyers desire to purchase less of it.

Answer 1

As the price of a good increases, the law of demand indicates that the quantity demanded by buyers decreases, hence buyers desire to purchase less of it (option D).

Step-by-step explanation:

The nature of demand indicates that as the price of a good increases, buyers desire to purchase less of it. This principle is known as the law of demand, which states that, keeping all other factors constant, the higher the price of a good, the lower the quantity demanded.

Conversely, when prices fall, the quantity demanded typically increases. For example, an increase in the price of gasoline may lead to consumers finding ways to reduce consumption, such as carpooling or taking public transit. Therefore, option D is the correct answer: as the price of a good increases, buyers desire to purchase less of it.