According to the law of demand, which of the following is true?
A) If prices decrease, customers will buy more.
B) Customers are not aware of small price changes.
C) The effect on demand from changes in price cannot be accurately predicted.
D) Demand equals supply.
E) If prices increase, customers will buy more.

Question

Quizplus · Accepted Answer

The law of demand states that, all else being equal, as the price of a good or service increases, the quantity demanded decreases, and conversely, as the price of a good or service decreases, the quantity demanded increases. Therefore, if prices decrease (as in option A), customers will buy more.

According to the Law of Demand, Which of the Following