What does the law of demand state?

The law of demand articulates the inverse relationship between price and quantity demanded: as prices decrease, consumers tend to purchase more of a good or service. This relationship reflects consumer behavior, where lower prices make a product more accessible and attractive to buyers, ultimately leading to increased demand.

When the price of a good falls, consumers perceive it as a better value, allowing them to either buy more of that item or allocate their budget to purchase other goods. In contrast, if prices rise, consumers may reduce their purchases or seek substitutes. This principle is foundational in understanding market dynamics, as it helps explain how changes in price can alter consumer behavior and influence overall market demand.

The other options do not align with the law of demand. For instance, higher prices leading to lower supply relates more to the law of supply rather than demand. Additionally, consumers do not typically buy more when prices are higher, as this would contradict the law of demand. Finally, demand does change with price variations, contrary to the assertion of a constant demand regardless of price changes.