Demand Practice Problems 1. Which of the following best describes the law of demand? (A)The price of a good increases when the demand for the good increases. (B)The price of a good decreases when the supply of the good decreases. (C)When the price of a good increases, its demand decreases. (D)When the price of a good decreases, its quantity demanded increases.

C. When the price of a good increases, its demand decreases.

Explanation:

The law of demand is one of the most fundamental concepts in economics, according to which the demand varies inversely with the price of a product.  This means that, if the price of a good increases, its demand decreases. For example, if someone wants to buy bottled water, they are more likely to buy more bottles if they are cheaper.

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