The Law of Demand Quiz

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Questions and Answers

What does the law of demand state?

There is an inverse relationship between price and quantity demanded, ceteris paribus. (correct)
The law of demand does not consider the relationship between quantity demanded and price.
The greater the amount to be sold, the higher must be the price at which it is offered.
When the price of a good rises, the quantity demanded of the good will also rise.

What may happen if the factors which determine demand undergo a change?

The inverse price-demand relationship may not hold good. (correct)
The inverse price-demand relationship will become stronger.
The inverse price-demand relationship will always hold true.
The law of demand will no longer be applicable.

What are the 'other things' assumed to be equal or constant in the law of demand?

Only the prices of related commodities.
Income of consumers and tastes and preferences of consumers.
Prices of related commodities, income of consumers, tastes and preferences of consumers, and all factors other than price which influence demand. (correct)
Only the prices of related commodities and income of consumers.

How does an increase in consumer incomes affect the inverse price-demand relationship?

<p>An increase in consumer incomes may not result in a decrease in the quantity demanded of a commodity, even if its price increases. (A)</p> Signup and view all the answers