CSEET · Economic and Business Environment · Basics of Demand and Supply and Forms of Market Competition
According to the law of demand, other things remaining constant, what happens to the quantity demanded of a normal good when its price falls?
Quantity demanded rises. The law of demand states that, other things constant, price and quantity demanded move in opposite directions, so a fall in the price of a normal good leads to a larger quantity demanded along the same demand curve.
- AQuantity demanded risesCorrect
- BQuantity demanded falls
- CQuantity demanded stays unchanged
- DDemand curve shifts to the left
Explanation
The law of demand states an inverse relationship between price and quantity demanded, ceteris paribus. When price falls, quantity demanded rises, which is a movement down along the same demand curve. A leftward shift would need a change in a factor other than price.
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