The law of demand states that, if nothing else changes,
A) a rise in the price of a product or service causes a decrease in quantity demanded.
B) a rise in the price of a product or service causes a decrease in quantity supplied.
C) an increase in incomes causes a decrease in quantity demanded.
D) a rise in the price of a product or service causes an increase in quantity demanded.
E) an increase in incomes causes an increase in quantity demanded.

Question

Quizplus · Accepted Answer

The law of demand states that there is an inverse relationship between price and quantity demanded. This means that as the price of a good or service increases, the quantity demanded will decrease, and vice versa. Therefore, option A is the correct choice. Options B and C are incorrect as they state the inverse of the law of demand, while options D and E suggest that a rise in price will result in an increase in quantity demanded, which is inconsistent with the law of demand.

The Law of Demand States That, If Nothing Else Changes