ECONOMICS
DEMAND
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
If P goes up, QD goes down
|
|
|
If P goes up, QD goes up
|
|
|
If P goes down, QD goes down
|
|
|
Price and QD are not related
|
Detailed explanation-1: -Law of demand states: As price of a good increases, the quantity demanded of the good falls, and as the price of a good decreases, the quantity demanded of the good rises, ceteris paribus. Restated: there is an inverse relationship between price (P) and quantity demanded (Qd).
Detailed explanation-2: -If the price goes up, the quantity demanded goes down (but demand itself stays the same). If the price decreases, quantity demanded increases. This is the Law of Demand. On a graph, an inverse relationship is represented by a downward sloping line from left to right.
Detailed explanation-3: -Assuming that non-price factors are removed from the equation, a higher price results in a lower quantity demanded and a lower price results in higher quantity demanded. Thus, the price of a product and the quantity demanded for that product have an inverse relationship, as stated in the law of demand.
Detailed explanation-4: -The law of demand states that the quantity purchased varies inversely with price. In other words, the higher the price, the lower the quantity demanded.