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    Question

    Which of the following best describes the law of demand?

    A When price rises, quantity demanded falls Correct Answer Incorrect Answer
    B When supply rises, demand rises Correct Answer Incorrect Answer
    C When price rises, quantity demand rises Correct Answer Incorrect Answer
    D When supply rises, demand falls Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Law of demand ·         It explains relationship between the quantity demanded of a commodity and its unit price. ·         As per it, demand varies inversely with price, other thing being equal. rise in the price of a commodity or service is followed by a reduction in the quantity demanded and fall in the price is followed by extension in demand, with other conditions remaining the same.

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