Question

Economists refer to the relationship that a higher price leads to a lower q uantity demanded as the

A. income gap
B. market equilibrium
C. law of demand
D. price model

Answer 1

The relationship that a higher price leads to a lower quantity demanded is known as the law of demand.

Step-by-step explanation:

Economists refer to the relationship where a higher price leads to a lower quantity demanded as the law of demand. This law states that, when all other factors remain constant, the higher the price of a good or service, the lower the demand for that product. Conversely, a lower price generally leads to a higher demand. This is because as the price goes up, the opportunity cost of purchasing that product also increases, leading consumers to avoid buying it in favor of retaining the ability to buy other goods or services they value more.