The Law of Demand Quiz

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Questions and Answers

How does the law of demand describe the impact of price on demand?

It describes no correlation between price and demand
It describes a positive correlation between price and demand
It describes a negative correlation between price and demand (correct)
It describes an erratic correlation between price and demand

What does the law of demand state about the relationship between demand and price?

As price decreases, demand increases
As price increases, demand decreases (correct)
As price increases, demand increases
As price decreases, demand decreases

What is the fundamental assertion of the law of demand?

Consumers buy less of a good when its price decreases and more when its price increases
Consumers buy more of a good regardless of its price
Consumers buy less of a good regardless of its price
Consumers buy more of a good when its price decreases and less when its price increases (correct)

Explain the relationship between demand and price according to the law of demand.

The law of demand states that there is an inverse relationship between the price of a good and the quantity demanded, meaning that as the price of a good increases, the quantity demanded decreases, and vice versa. Signup and view all the answers

What does the law of demand suggest about the impact of price on demand?

The law of demand suggests that as the price of a good increases, the quantity demanded decreases, and as the price of a good decreases, the quantity demanded increases. Signup and view all the answers

How does the law of demand describe the relationship between demand and price?

The law of demand describes the relationship between demand and price as inverse, meaning that as the price of a good rises, the quantity demanded falls, and when the price falls, the quantity demanded rises. 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 good and the quantity demanded.
As the price of a good increases, the quantity demanded decreases, ceteris paribus (all other things being equal).
Conversely, as the price of a good decreases, the quantity demanded increases.
The law of demand suggests that higher prices make a good less attractive to consumers, leading to a decrease in demand.
Similarly, lower prices make a good more attractive, leading to an increase in demand.

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Description

Test your understanding of the law of demand with this quiz. Explore the relationship between demand and price, and how changes in price impact consumer behavior. Assess your knowledge of the fundamental assertion of the law of demand through a series of questions and deepen your understanding of this economic principle.