Which statement best explains the law of demand? A. The quantity demanded by consumers increases as prices rise, then decreases as prices fall.
B. The quantity demanded by consumers decreases as prices rise, then increases as prices fall.
C. The quantity demanded by producers increases as prices rise, then decreases as prices fall.
D. The quantity demanded by producers decreases as prices rise, then increases as prices fall.
The correct answer is B. The quantity demanded by consumers decreases as prices rise, then increases as prices fall.
Explanation: The law of demand states that there is an inverse relationship between price and quantity demanded. This means that when prices increase, consumers will generally buy less of a good or service, and when prices decrease, they will buy more. This behavior reflects consumers’ sensitivity to price changes, as higher prices can lead them to seek alternatives or reduce their purchases. Keep up the great work in your studies! If you have more questions, feel free to ask or check out the extended services page for further assistance.