The law of demand implies, holding everything else constant, that
A) as the price of bagels increases, the quantity of bagels demanded will decrease.
B) as the price of bagels increases, the demand for bagels will decrease.
C) as the price of bagels increases, the quantity of bagels demanded will increase.
D) as the price of bagels increases, the demand for bagels will increase.

Question

Quizplus · Accepted Answer

The law of demand states that as the price of a good increases, the quantity demanded of that good will decrease, holding everything else constant. This means that Choice A correctly describes the law of demand. Choice B is incorrect because it suggests that the entire demand curve shifts, rather than just a movement along it. Choices C and D are also incorrect because they suggest that as the price of bagels increases, people will want to buy more of them, which contradicts the law of demand.

The Law of Demand Implies, Holding Everything Else Constant, That