The Law of Demand Explains Why People

question 104

Multiple Choice

The law of demand explains why people:

• A) Crave certain goods.
• B) Are willing to buy more of a good as price falls.
• C) Are willing to pay more as marginal utility diminishes.
• D) Are able to buy more of a good as supply increases.

---

Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded.

Unit Elastic

Describes a situation where a percentage change in the price of a good or service results in an equal percentage change in the quantity demanded or supplied.

Cheddar Cheese

A relatively hard, off-white or orange, natural cheese originating from the village of Cheddar in England.

Total Revenue

The total income generated from selling goods or services, calculated by multiplying the price by the quantity sold.