The law of demand is the assertion that:

• A. as the price of a good increases, the quantity demanded decreases, all else equal
• B. as the price of a good decreases, the supply of the good decreases
• C. as consumer income increases, the demand for all goods increases
• D. as the price of a good increases, the quantity demanded increases, all else equal

Answer: (A)

Verified step by step guidance

1. Understand that the law of demand describes the relationship between the price of a good and the quantity demanded by consumers, holding all other factors constant (ceteris paribus).
2. Recall that the law of demand states that when the price of a good increases, the quantity demanded decreases, and conversely, when the price decreases, the quantity demanded increases.
3. Recognize that this inverse relationship is fundamental to demand curves, which typically slope downward from left to right.
4. Note that the law of demand does not describe changes in supply or the effect of changes in consumer income on demand; these are separate concepts.
5. Therefore, identify the correct statement as the one that reflects the inverse relationship between price and quantity demanded, all else equal.