Which best explains how the law of demand affects consumers?

• A. As the price of a good increases, consumers buy less of it.
• B. As the price of a good remains constant, consumers always buy the same quantity.
• C. As the price of a good increases, consumers buy more of it.
• D. As the price of a good decreases, the demand curve shifts to the left.

Answer: (A)

Verified step by step guidance

1. Understand the law of demand: It states that, ceteris paribus (all else equal), when the price of a good increases, the quantity demanded by consumers decreases, and vice versa.
2. Analyze each option in the context of the law of demand: For example, if the price increases, do consumers buy more or less according to the law?
3. Recognize that the law of demand refers to movement along the demand curve, not shifts of the demand curve itself. A change in price causes a movement along the curve, not a shift.
4. Evaluate the option stating that as the price remains constant, consumers always buy the same quantity. This ignores other factors that can affect demand, so it is not a general rule of the law of demand.
5. Conclude that the best explanation is the one that aligns with the law of demand: as the price of a good increases, consumers buy less of it.