Question : The law of demand states that when _____.
Option 1: income and price rise demand rises
Option 2: income rises demand rises
Option 3: price rises demand rises
Option 4: price falls demand rises
Correct Answer: price falls demand rises
Solution : The correct answer is price falls and demand rises .
Law Of Demand states that when the price of a good or service increases, keeping all other factors equal, the quantity demanded for that good, or service decreases. Conversely, when the price of a good or service decreases, all else being for that good or service increases. This law suggests that as the price of a product goes up, people tend to buy less of it, and when the price goes down, people tend to buy more of it.
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