What describes the law of demand?

The law of demand articulates the inverse relationship between the price of a good or service and the quantity demanded by consumers. As price decreases, the quantity demanded typically increases, and conversely, as price increases, the quantity demanded tends to decrease. This phenomenon occurs because consumers are generally more willing to purchase more of a good when it is less expensive, and they may forgo purchasing it when the price is higher due to budget constraints.

This fundamental principle of economics highlights consumer behavior and how it influences market dynamics. It helps explain various market phenomena, such as why sales promotions or discounts can lead to a spike in sales volume, as reduced prices make the goods more attractive to consumers. Understanding this relationship is crucial for businesses and policymakers when analyzing market trends and formulating pricing strategies, as well as for anticipating changes in consumer buying patterns based on price fluctuations.