Question

The following table contains a demand schedule for a good.

Price Quantity Demanded
$10 100
$20 Q1
If the law of demand applies to this good, then Q1 could be:

A) 0.
B) 100.
C) 200.
D) 400.

Answer 1

Under the law of demand, an increase in price leads to a decrease in quantity demanded. Since the price increased from $10 to $20 in the demand schedule, Q1 must be less than 100, making Option A (0) or Option B (100) plausible answers.

Step-by-step explanation:

The student's question refers to a demand schedule and the concept of the law of demand. According to the law of demand, there is an inverse relationship between price and the quantity demanded of a good or service. That means as price increases, the quantity demanded decreases, and vice versa. In this case, at $10, the quantity demanded is 100. When the price increases to $20, we would expect the quantity demanded, Q1, to be less than 100 based on the law of demand.Therefore, the possible values for Q1 considering the law of demand would be less than 100. Option A (0) and Option B (100) are the plausible choices, with 0 being the most extreme case where no one would want to buy the product at the higher price. The other options, 200 and 400, would violate the law of demand, since they imply an increase in quantity demanded despite an increase in price, which is the opposite of what the law of demand states.