The figure given below represents the PPC in two nations

Question

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
 
-Which of the following statements correctly defines the law of demand?
A)The lower the price of a commodity, the lower the quantity demanded of that commodity. 
B)As the price of a commodity increases, the quantity demanded of that commodity also increases. 
C)The lower the price of a commodity, the greater the quantity demanded of that commodity. 
D)The lower the price of a commodity, the greater the quantity supplied of that commodity. 
E)The quantity demanded of a particular good decreases with an increase in the price of a substitute good.

Quizplus · Accepted Answer

The law of demand states that there is an inverse relationship between the price of a good and the quantity demanded of that good. This means that as the price of a good decreases, the quantity demanded of that good increases, and vice versa. Therefore, option C correctly defines the law of demand.