Question

Which of the following is NOT addressed in the Law of Demand?

		The effect of a price increase on quantity demanded.
		The inverse relationship between the willingness and ability of consumers to purchase a good and the price of that good.
		The perception of consumers that higher-priced goods are of better quality than lower-priced goods.
		The expectation that the demand curve for most goods is negatively sloped (downward sloping).

Answer 1

Option C

• The perception of consumers that higher priced goods are of better quality than lower priced goods, is not addressed in the law of demand.
• The law of demand states that as the price decreases, the demand for a price increases and vice versa.
• Hence the law of demand shows that there is an inverse relationship between price and quantity demanded of a good.
• There is an inverse relationship between the willingness to buy and the price of a good as consumers are less willing to buy when the price increases and more willing to buy when the price decreases.
• The law of demand also shows the expectations that demand curve for most goods is negatively sloped .