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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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