which of the following describes the relationship between price and quantity demanded according to the law of demand?

The law of demand says there is an inverse relationship between price and quantity demanded: as price rises, quantity demanded falls, and as price falls, quantity demanded rises, holding other factors constant (ceteris paribus).

Quick Scoop

• When the price increases , consumers generally buy less of that good.

• When the price decreases , consumers generally buy more of that good.

• Economists summarize this as an inverse or negative relationship between price and quantity demanded, assuming income, tastes, and prices of other goods do not change.

How to recognize the correct option

In a multiple-choice question, the correct statement will usually look like one of these:

• “As price rises, quantity demanded falls; as price falls, quantity demanded rises.”

• “There is an inverse (or negative) relationship between price and quantity demanded, ceteris paribus.”

Any option saying “price and quantity demanded move in the same direction” (both rise or both fall together) does not describe the law of demand.

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