Alyssa rents five movies per month when the price is $3.00 each and seven movies per month when the price is $2.50.What has Alyssa demonstrated

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Alyssa's behavior of renting more movies when the price is lower and less when the price is higher is a clear demonstration of the law of demand. The law of demand states that as the price of a good or service increases, the quantity demanded of that good or service will decrease, ceteris paribus. Conversely, as the price of a good or service decreases, the quantity demanded of that good or service will increase, ceteris paribus. In this case, when the price is $3.00 per movie, Alyssa rents only five movies per month, but when the price drops to $2.50 per movie, she rents seven movies per month. This clearly shows how Alyssa responds to changes in price changes which is consistent with the law of demand.

Alyssa Rents Five Movies Per Month When the Price Is