Question

According to the law of demand, all other things being equal, ________?

1) the quantity demanded of a good decreases as its price increases
2) the quantity demanded of a good increases as its price increases
3) the quantity demanded of a good remains constant as its price changes
4) the quantity demanded of a good is unrelated to its price

Answer 1

The law of demand states that, all else being equal, the quantity demanded of a good decreases as its price increases.

Step-by-step explanation:

According to the law of demand, all other things being equal, the quantity demanded of a good decreases as its price increases. This law illustrates the inverse relationship between price and quantity demanded in economics. When the price of an item goes up, the opportunity cost of purchasing that item also increases; consequently, consumers are less inclined to buy it, leading to a decrease in quantity demanded. Conversely, when prices fall, the item becomes relatively more affordable, and the quantity demanded tends to increase as consumers are more willing to purchase it.