What happens to quantity demanded when the price of a good decreases?

What happens to quantity demanded when the price of a good decreases?

• A. Quantity demanded remains the same
• B. Quantity demanded decreases
• C. Quantity demanded increases
• D. Quantity supplied decreases

Answer: (C)

When the price of a good decreases, the quantity demanded for that good generally increases due to the law of demand. The law of demand states that, all else equal, as the price of a good falls, consumers are more likely to purchase a greater quantity of that good. This occurs because the lower price makes the good more affordable and attractive to consumers, often leading them to buy more than they would at a higher price. Additionally, a decrease in price can also result in an increased willingness to buy by those who would have considered the good too expensive at the original price. This phenomenon is often illustrated through a demand curve, which typically slopes downwards from left to right, demonstrating that quantity demanded moves in the opposite direction to price changes. Thus, the correct answer highlights a fundamental concept of microeconomics regarding consumer behavior and market dynamics.

When the price of a good decreases, the quantity demanded for that good generally increases due to the law of demand. The law of demand states that, all else equal, as the price of a good falls, consumers are more likely to purchase a greater quantity of that good. This occurs because the lower price makes the good more affordable and attractive to consumers, often leading them to buy more than they would at a higher price.

Additionally, a decrease in price can also result in an increased willingness to buy by those who would have considered the good too expensive at the original price. This phenomenon is often illustrated through a demand curve, which typically slopes downwards from left to right, demonstrating that quantity demanded moves in the opposite direction to price changes. Thus, the correct answer highlights a fundamental concept of microeconomics regarding consumer behavior and market dynamics.