Which statement is generally true according to the law of demand?

• A. As the price of a good increases, the quantity demanded increases.
• B. The quantity demanded remains unchanged when the price changes.
• C. There is no relationship between price and quantity demanded.
• D. As the price of a good increases, the quantity demanded decreases.

Answer: (D)

Verified step by step guidance

1. Understand the law of demand: It states that, ceteris paribus (all else equal), there is an inverse relationship between the price of a good and the quantity demanded.
2. Identify the key variables: Price (P) and Quantity Demanded (Qd). According to the law, when price increases, quantity demanded decreases, and vice versa.
3. Analyze each statement given in the problem: Check if it aligns with the inverse relationship described by the law of demand.
4. Recognize that the statement 'As the price of a good increases, the quantity demanded decreases' correctly reflects the law of demand.
5. Conclude that the other statements contradict the law of demand because they either suggest a direct relationship, no change, or no relationship at all between price and quantity demanded.