The 'law of demand' implies that: a) as prices fall, quantity demanded increases

Economics Apr 19, 2021

The 'law of demand' implies that: a) as prices fall, quantity demanded increases. b) as prices rise, demand decreases. c) as prices fall, demand increases. d) as prices rise, quantity demanded increases.

Expert Solution

Answer

a )

Explanation

The law of demand states that there is an inverse relationship between price and quantity demanded, i.e. as prices fall, quantity demanded increases or, when prices rise, quantity demanded falls. So, the correct option is A "as price fall, quantity demanded increases".

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