What does the law of demand state?

The law of demand illustrates a fundamental relationship between price and quantity demanded in a market. Specifically, it asserts that as the price of a good or service decreases, the quantity demanded by consumers increases, assuming all other factors remain constant. This relationship reflects consumer behavior whereby lower prices tend to make products more attractive, encouraging buyers to purchase more.

When prices drop, consumers perceive that they are getting better value for their money. This was illustrated historically during sales promotions or discounts, where a reduced price often leads to increased purchases. The law of demand is visually represented by a downward-sloping demand curve on a graph, where the x-axis represents quantity demanded and the y-axis represents price.

In contrast, the other choices misinterpret the relationship between price and quantity demanded. Some suggest that higher prices lead to more purchases or that there is no relationship at all, which contradicts basic economic principles on consumer behavior.