Question

According to ____________________, if other things being equal, there is a negative relation between demand for a commodity and its price; when price of the commodity increases, its demand falls.

• A. the demand and supply rule
• B. the law of creating demand
• C. the law of demand
• D. the principle of social marketing

Hint:

Remember the inverse relationship: Price up, Demand down; Price down, Demand up. This is the Law of Demand. The opposite is the Law of Supply (Price up, Supply up), which describes the producer's perspective.

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
The question describes a fundamental principle of economics that explains the relationship between the price of a good and the quantity consumers are willing to buy.

Step 2: Detailed Explanation:


The law of demand: This is a core principle of microeconomics. It states that, {ceteris paribus} (all other factors being equal), as the price of a good or service increases, the quantity demanded decreases, and vice versa. The question provides a perfect textbook definition of the law of demand.
The demand and supply rule: This is a broad term. While the law of demand is part of the model of demand and supply, the "rule" itself usually refers to how the interaction of demand and supply determines market equilibrium price and quantity.
The law of creating demand: This is not a standard economic principle. It might refer to marketing strategies, but not the fundamental price-quantity relationship.
The principle of social marketing: This applies marketing concepts to influence behaviors for social good, not to describe basic economic laws.

Step 3: Final Answer:
The principle described is the law of demand.