3
QuizMultiple Choice

Entrepreneurship — Unit test

Question 3 • IL-Economics

Which statement best explains the law of demand?

Answer
A
The quantity demanded by consumers increases as prices rise, then decreases as prices fall.
B
The quantity demanded by consumers decreases as prices rise, then increases as prices fall.
C
The quantity demanded by producers increases as prices rise, then decreases as prices fall.
D
The quantity demanded by producers decreases as prices rise, then increases as prices fall.

Explanation

The law of demand describes how consumers respond to a price change: when a good’s price rises, consumers generally buy less of it, and when the price falls, they generally buy more. Therefore, the best statement is that quantity demanded by consumers decreases as prices rise and increases as prices fall.

AI-written and checked against the verified answer.

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