Based on the trends shown in the graph, which of the following best describes the relationship between price and quantity demanded?

• A. Quantity demanded remains constant as price changes.
• B. As price increases, quantity demanded decreases.
• C. As price increases, quantity demanded increases.
• D. Price and quantity demanded are unrelated.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the Law of Demand, which states that, ceteris paribus, as the price of a good increases, the quantity demanded of that good typically decreases, and vice versa.
2. Step 2: Analyze the graph by observing how the quantity demanded changes as the price changes. Look for the direction of movement along the demand curve.
3. Step 3: Identify whether the quantity demanded moves inversely with price (quantity demanded decreases when price increases), remains constant, increases with price, or shows no clear pattern.
4. Step 4: Compare your observation with the options given to determine which statement best matches the relationship shown in the graph.
5. Step 5: Conclude that if the graph shows quantity demanded decreasing as price increases, this aligns with the law of demand, confirming the correct description of the relationship.