Which statement is consistent with the law of demand?

• A. As the price of a good decreases, the quantity demanded decreases.
• 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 increases, the quantity demanded increases.

Answer: (C)

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 of that good decreases, and vice versa.
2. Identify the relationship between price and quantity demanded: The law of demand describes an inverse relationship, meaning price and quantity demanded move in opposite directions.
3. Evaluate each statement by comparing it to the law of demand: For example, if the price decreases, the quantity demanded should increase, not decrease or remain unchanged.
4. Recognize that the correct statement must reflect this inverse relationship, so the quantity demanded decreases when the price increases.
5. Conclude that the statement 'As the price of a good increases, the quantity demanded decreases' is consistent with the law of demand.