Final answer:
The law of demand states that an increase in price of a good leads to a decrease in the quantity demanded because as the cost goes up, the opportunity cost of buying that good rises as well.
Step-by-step explanation:
The law of demand describes the inverse relationship between the price of a good or service and the quantity demanded by consumers. Therefore, the statement that best describes the law of demand is 'C. An increase in price is associated with a decrease in quantity demanded'.
When the price goes up, the opportunity cost of buying that product also increases, which leads consumers to purchase less of it, or forgo it for something else that provides more value to them.