The law of demand states that, other things equal, when the price of a good increases:

• A. the quantity demanded decreases
• B. the quantity demanded increases
• C. the demand curve becomes steeper
• D. the demand curve shifts to the right

Answer: (A)

Verified step by step guidance

1. Understand the law of demand: It states that, ceteris paribus (all other things being equal), there is an inverse relationship between the price of a good and the quantity demanded.
2. Identify what happens when the price of a good increases: According to the law of demand, as price goes up, consumers will generally buy less of that good.
3. Distinguish between a movement along the demand curve and a shift of the demand curve: A change in price causes a movement along the demand curve (change in quantity demanded), not a shift of the curve itself.
4. Recognize that the demand curve becoming steeper is unrelated to a price change; it relates to changes in price elasticity or other factors affecting demand responsiveness.
5. Conclude that the correct interpretation is that when the price increases, the quantity demanded decreases, reflecting a movement upward along the demand curve.