What does the law of demand state?

The law of demand is a fundamental principle in economics that describes the relationship between price and quantity demanded. It states that, all else being equal, as the price of a good or service decreases, the quantity demanded by consumers increases. This occurs because lower prices make products more accessible to a wider range of consumers, leading to an increase in the quantity they are willing to purchase.

Choosing the option that indicates an increase in quantity demanded as price decreases aligns perfectly with the law of demand. It reflects the intuitive understanding that when something becomes more affordable, more consumers are likely to buy it.

The other choices do not accurately reflect the law of demand. For example, stating that as price increases, demand decreases describes an aspect of the law of demand but does not fully capture the relationship involving quantity demanded. Demand remaining constant despite price changes does not align with any economic principle, as demand typically varies with price. Lastly, asserting that quantity demanded is influenced only by advertising ignores other significant factors like price, consumer income, and preferences, which also play crucial roles in determining demand.