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The Law of Demand Quiz

Created by

@ProlificSugilite9195

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Questions and Answers

What is the Law of Demand?

When the price of a product rises, its quantity demanded decreases, and vice versa

When the price of a product rises, its quantity demanded increases, and vice versa

When the price of a product falls, its quantity demanded decreases, and vice versa

When the price of a product falls, its quantity demanded increases, and vice versa (correct)

What happens to the quantity demanded when the price of a commodity decreases?

It remains constant

It fluctuates

It decreases

It increases (correct)

In the given example, what does the individual do when the price of the pack of soft drinks is reduced to ₹105?

Purchases three packs

Purchases two packs (correct)

Purchases one pack

Does not purchase the pack at all

What is the common observation about consumer behavior and the price of a commodity?

<p>Consumers purchase more when the price is low and less when the price is high</p> Signup and view all the answers

What is the relationship between the demand and price of a commodity according to the law of demand?

<p>Inverse</p> Signup and view all the answers

Study Notes

Law of Demand

The Law of Demand states that there is an inverse relationship between the price of a commodity and the quantity demanded.
When the price of a commodity decreases, the quantity demanded increases, and vice versa.

Effect of Price Change on Quantity Demanded

If the price of a commodity decreases, the quantity demanded increases.
For example, when the price of a pack of soft drinks is reduced to ₹105, the individual is likely to purchase more.

Consumer Behavior and Price

A common observation about consumer behavior is that when the price of a commodity decreases, people tend to buy more, and when the price increases, they tend to buy less.
This inverse relationship between the demand and price of a commodity is the foundation of the Law of Demand.

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Description

Test your understanding of the Law of Demand with this quiz. Learn about the inverse relationship between price and quantity demanded, and see examples of how it applies in real-world scenarios.