Based on the accompanying diagram of the demand curve for DVDs, which of the following best describes the relationship between price and quantity demanded?

• A. As the price of DVDs decreases, the quantity demanded remains unchanged.
• B. As the price of DVDs increases, the quantity demanded increases.
• C. As the price of DVDs increases, the quantity demanded decreases.
• D. There is no relationship between the price of DVDs and the quantity demanded.

Answer: (C)

Verified step by step guidance

1. Understand the Law of Demand, which states that, ceteris paribus, as the price of a good increases, the quantity demanded decreases, and vice versa.
2. Identify that the demand curve typically slopes downward from left to right, illustrating the inverse relationship between price and quantity demanded.
3. Analyze the given options by comparing them to the Law of Demand: check if the statements align with the inverse relationship between price and quantity demanded.
4. Recognize that the correct description is that as the price of DVDs increases, the quantity demanded decreases, which matches the downward slope of the demand curve.
5. Conclude that the other options either contradict the Law of Demand or suggest no relationship, which is inconsistent with standard microeconomic theory.