Question

The law of demand and downward sloping demand curve tell us which of the following:

A. There is a direct relationship between price and quantity supplied
B. There is a direct relationship between price and quantity demanded
C. There is a direct relationship between price and demand
D. There is an inverse relationship between price and quantity demanded
E. There is an inverse relationship between price and supply

Answer 1

The correct answer is D, indicating that there's an inverse relationship between price and quantity demanded as explained by the law of demand and illustrated by a downward sloping demand curve.

Step-by-step explanation:

The law of demand and the downward sloping demand curve tell us that there is an inverse relationship between price and quantity demanded. This means that as the price of a good or service increases, the quantity demanded decreases, and conversely, as the price decreases, the quantity demanded increases.

This relationship is graphically represented by a demand curve that slopes downward, such as in the provided demand schedule for gasoline.

In response to the multiple-choice question, the correct answer is D. There is an inverse relationship between price and quantity demanded.