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25 December, 05:16

Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded is referred to as Question 1options: 1) equilibrium. 2) the law of demand. 3) the relationship between supply and demand. 4) the definition of an inferior good.

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  1. 25 December, 05:49
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    Answer: The law of demand

    Explanation: The law of demand states that everything else being equal, the demand and price of a commodity will reflect a negative relationship.

    This negative relationship occurs due to the income effect. As per the income effect when the price of a commodity rises, many of its existing customers stops consuming it as the price of the commodity exceeds their purchasing power.

    Hence, from the above we can conclude that the right option is B.
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