The Law of Demand States That

question 150

Multiple Choice

The law of demand states that

• A)consumers have unlimited demands for a good.
• B)a higher price will lead to increased sales.
• C)the price can never be too high for some consumers.
• D)quantity demanded will vary inversely with the price of the good.

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Definitions:

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a fixed amount of income.

Money Income

The total amount of monetary earnings received by an individual or household, including wages, salaries, benefits, and income from investments.

Price Increase

A rise in the cost of goods or services, which can be influenced by factors such as inflation, demand, or production costs.

Indifference Curve

A graph representing combinations of two goods that give a consumer equal satisfaction and utility.