Multiple Choice
Which of the following will cause the demand for a normal good to increase?
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3. The Market Forces of Supply and Demand
The Demand Curve
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Which of the following is consistent with the law of demand?
A
As the price of a good increases, the quantity demanded increases.
B
As the price of a good decreases, the quantity demanded remains unchanged.
C
As the price of a good increases, the quantity demanded decreases.
D
As the price of a good decreases, the quantity demanded decreases.
Verified step by step guidance1
Understand the law of demand: It states that, ceteris paribus (all else equal), when the price of a good increases, the quantity demanded of that good decreases, and vice versa.
Analyze each option by comparing it to the law of demand: For example, if the price increases and quantity demanded increases, this contradicts the law of demand.
Check the option where the price increases and quantity demanded decreases, as this aligns with the law of demand.
Verify that the option where the price decreases and quantity demanded decreases also contradicts the law of demand, since quantity demanded should increase when price falls.
Conclude that the statement consistent with the law of demand is: 'As the price of a good increases, the quantity demanded decreases.'
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