PRC-3 · Chapter 10 · Question 34 of 70
The Law of Demand states that, ceteris paribus, there is what kind of relationship between the price of a good and the quantity demanded?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) An inverse relationship
Explanation
The Law of Demand dictates an inverse relationship: as the price of a good rises, the quantity demanded falls, assuming all other factors remain constant.
More Demand, Supply and Market Equilibrium MCQs
- Q36A massive increase in national wages allows families to stop buying cheap, low-quality bread and start buying premium bakery goods. What…
- Q37If a government decides to impose a 'Price Floor' on wheat to guarantee farmers a high income, and sets this price significantly above the…
- Q38Cars and petrol are complementary goods. If the global price of petrol suddenly triples, what is the most immediate effect on the…
- Q39A strict new law forces landlords to cap apartment rentals at Rs. 10,000 per month (a Price Ceiling), while the natural equilibrium is Rs…
- Q40A farmer brings highly perishable fresh strawberries to the Sunday market. Since they will rot by Monday, he must sell all of them today…