Which principle states that higher prices result in a lower quantity demanded by consumers?

Which principle states that higher prices result in a lower quantity demanded by consumers?

• A. Law of Supply
• B. Law of Demand
• C. Equilibrium principle
• D. Market adjustment

Answer: (B)

The Law of Demand is the principle that asserts that as the price of a good or service increases, the quantity demanded by consumers tends to decrease, assuming all other factors remain constant. This relationship reflects consumers' preferences and behaviors; when prices are high, consumers may either not purchase the good or seek alternatives, leading to a decrease in demand. Thus, the Law of Demand illustrates the inverse relationship between price and quantity demanded, a fundamental concept in economics that helps explain consumer behavior in response to changing prices. While other options, such as the Law of Supply, focus on how producers respond to price changes, or the equilibrium principle which emphasizes the balance between supply and demand at a certain price, they do not specifically address the decrease in demand associated with increasing prices. The market adjustment reflects how supply and demand interact over time, but it does not define the direct relationship of price to consumer demand described by the Law of Demand.

The Law of Demand is the principle that asserts that as the price of a good or service increases, the quantity demanded by consumers tends to decrease, assuming all other factors remain constant. This relationship reflects consumers' preferences and behaviors; when prices are high, consumers may either not purchase the good or seek alternatives, leading to a decrease in demand. Thus, the Law of Demand illustrates the inverse relationship between price and quantity demanded, a fundamental concept in economics that helps explain consumer behavior in response to changing prices.

While other options, such as the Law of Supply, focus on how producers respond to price changes, or the equilibrium principle which emphasizes the balance between supply and demand at a certain price, they do not specifically address the decrease in demand associated with increasing prices. The market adjustment reflects how supply and demand interact over time, but it does not define the direct relationship of price to consumer demand described by the Law of Demand.