The law of demand asserts that consumers recognize higher prices as a sign of quality, and that a price increase leads them to increase their demand for a good.

Question

Quizplus · Accepted Answer

The law of demand states that, all else being equal, as the price of a good increases, the quantity demanded decreases, and vice versa. It does not suggest that higher prices lead to increased demand.

The Law of Demand Asserts That Consumers Recognize Higher Prices