The law of demand
A)is only an assumption that cannot be tested.
B)only applies to necessities, not to luxuries.
C)is supported by observations of human behavior in the marketplace.
D)does not apply to scarce goods.

Question

Quizplus · Accepted Answer

The law of demand is a fundamental principle in economics that states that as the price of a good or service increases, the quantity demanded by consumers will decrease, and vice versa. This law has been observed in the marketplace through empirical data and is widely accepted by economists as a key determinant of consumer behavior.

Answer: D 
 This statement is incorrect. The law of demand applies to all goods and services, including those that are scarce. In fact, scarcity is often a key factor in driving up prices, which in turn can lead to a decrease in the quantity demanded as consumers may not be willing or able to pay the higher price.

The Law of Demand