Final Answer:
The law of demand states that, holding all else constant is d. As the price of a good or service falls, the quantity demanded rises.
Step-by-step explanation:
The correct statement is option d. According to the law of demand, there is an inverse relationship between the price of a good or service and the quantity demanded. When the price decreases, consumers are generally more willing to buy more of that good or service, and conversely, when the price increases, the quantity demanded tends to decrease.
This phenomenon is rooted in basic economic behavior—consumers seek to maximize their satisfaction or utility, and lower prices make goods and services more attractive.
When the price falls, consumers perceive that they can obtain a higher level of satisfaction for their money, leading to an increased willingness to purchase. This relationship is crucial in understanding market dynamics and is a fundamental concept in microeconomics. The law of demand, while holding other factors constant, provides a simplified framework for analyzing how changes in price impact consumer behavior.
This principle is widely applicable and forms the basis for various economic models and predictions, guiding businesses, policymakers, and economists in understanding and anticipating market trends. In essence, the law of demand encapsulates a key aspect of consumer decision-making in the marketplace.
Therefore, the correct answer is: d. As the price of a good or service falls, the quantity demanded rises.