According to the law of demand, which of the following statements is true?

• A. The demand curve is typically upward sloping.
• B. As the price of a good increases, the quantity demanded increases, ceteris paribus.
• C. The law of demand does not apply when all other factors are held constant.
• D. As the price of a good increases, the quantity demanded decreases, ceteris paribus.

Answer: (D)

Verified step by step guidance

1. Understand the law of demand: It states that, ceteris paribus (all other factors held constant), when the price of a good increases, the quantity demanded of that good decreases, and vice versa.
2. Analyze the shape of the demand curve: Since quantity demanded decreases as price increases, the demand curve is typically downward sloping, not upward sloping.
3. Evaluate the given statements one by one: The statement 'The demand curve is typically upward sloping' contradicts the law of demand and is therefore false.
4. Check the statement 'As the price of a good increases, the quantity demanded increases, ceteris paribus': This is the opposite of the law of demand and is false.
5. Confirm the correct statement: 'As the price of a good increases, the quantity demanded decreases, ceteris paribus' aligns perfectly with the law of demand and is true.