Question

Law of Demand states the
relationship between quantity demanded and price
(a) Positive (b) inverse (c) direct (d) none of these​

Answer 1

Answer:

False. The relationship between price and demand is negative i.e., they are inversely related. By inversely related we mean that as the price of the goods increase the demand of that commodity decreases and vice versa. This because of the law of diminishing marginal utility. According to this law, the utility/satisfaction of the consumer goes on decreasing with every additional consumption of the commodity and hence, the consumer will buy more goods only when the price decreases. Other reasons are income effect, substitution effect, different uses of commodity etc.

Explanation:

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