The macroeconomic law of demand is an example of the fallacy of composition.

Question

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The macroeconomic law of demand states that as the price of a good or service increases, the quantity demanded decreases, ceteris paribus (all other things being equal). However, this law applies to an individual consumer's decision-making process and cannot be directly applied to the entire economy. The fallacy of composition arises when one assumes that what is true for an individual is also true for the group as a whole. Therefore, the macroeconomic law of demand is an example of the fallacy of composition.

The Macroeconomic Law of Demand Is an Example of the Fallacy