What does the Law of Demand state?

• A. A movement along the demand curve caused by a change in income.
• B. A movement of the entire demand curve caused by a non-price determinant: income, tastes, prices of related goods, expectations, or population.
• C. As the price of a good rises, quantity demanded falls — and vice versa — assuming all other factors remain constant.
• D. The concept that demand curves always slope downward due to technology.

Answer: (C)

The main idea here is the inverse relationship between price and quantity demanded, holding everything else constant. When the price of a good falls, the quantity demanded tends to rise, and when the price rises, the quantity demanded tends to fall. This movement along the same demand curve happens because buyers respond to a lower price by purchasing more, and to a higher price by buying less, assuming no other factors change (the ceteris paribus idea). The statement that matches this is that as price changes, quantity demanded moves in the opposite direction, with other factors held constant. Changes in non-price determinants like income, tastes, or prices of related goods shift the entire demand curve rather than causing a single point to move along it. The notion that demand curves slope downward due to technology mixes up the idea with the supply side, where technology can affect how much is produced at each price.