According to the law of demand, the quantity demanded of a good is related to
A) the average price of all goods.
B) income.
C) any factor that affects the decision of an individual consumer but not the market.
D) the relative price of that good.

Question

Quizplus · Accepted Answer

The law of demand states that as the price of a good rises, the quantity demanded of that good will decrease, ceteris paribus. This means that the demand for a good is inversely related to its price, or in other words, that the relative price of that good is the key factor that affects the quantity demanded. Therefore, choice D is the correct answer. Choices A, B, and C are incorrect because the law of demand specifically focuses on the relationship between price and quantity demanded, and not on other factors such as income, average price of all goods, or individual consumer decisions.

According to the Law of Demand, the Quantity Demanded of a Good