Offering to buy more of a product if a manufacturer lowers its wholesale price is an example of:

• A. the law of demand
• B. diminishing marginal utility
• C. the law of supply
• D. price elasticity of supply

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the scenario described: a buyer offers to purchase more of a product if the manufacturer lowers the wholesale price. This implies a relationship between price and quantity demanded.
2. Step 2: Recall the law of demand, which states that, ceteris paribus, when the price of a good decreases, the quantity demanded increases, and vice versa.
3. Step 3: Contrast this with the law of supply, which states that producers are willing to supply more of a good at higher prices, not lower prices.
4. Step 4: Recognize that diminishing marginal utility refers to the decrease in additional satisfaction from consuming more units, which is related but not directly about purchasing more due to price changes.
5. Step 5: Understand that price elasticity of supply measures how much the quantity supplied responds to a change in price, which is about the supplier's responsiveness, not the buyer's behavior.