Question

a. which statement is consistent with the law of demand?
a reduction in market price will lead to a decrease in quantity demanded.
at a zero price, quantity demanded will be equal to zero.
a reduction in market price will lead to an increase in quantity demanded.
an increase in market price will lead to an increase in quantity demanded.

b. which of the following characteristics lead to a downward - sloping demand curve?
instructions: in order to receive full credit, you must make a selection for each option. for correct answer(s), click the place a check mark. for incorrect answer(s), click the option twice to empty the box.
increasing marginal benefit
an increase in purchasing power as market price decreases
a decline in the price of a related good
increasing opportunity costs
diminishing preferences for a particular good
diminishing marginal utility

c. how is a market demand curve derived from individual demand curves?
add up quantities demanded by all individual consumers for each price.
calculate the average quantity demanded among all consumers.
use the largest quantity demanded among all consumers for each price.
add up prices paid for each unit demanded by individuals.

Explanation:

a. The law of demand states that, ceteris paribus, there is an inverse relationship between the price of a good and the quantity demanded of that good.
b. The downward-sloping demand curve is driven by the income effect (purchasing power change with price) and diminishing marginal utility (each additional unit gives less satisfaction, so consumers only buy more at lower prices).
c. Market demand represents the total quantity all consumers in a market want to buy at each price level.

Answer:

a. A reduction in market price will lead to an increase in quantity demanded.
b.

• ❌ Increasing marginal benefit
• ✅ An increase in purchasing power as market price decreases
• ❌ A decline in the price of a related good
• ❌ Increasing opportunity costs
• ❌ Diminishing preferences for a particular good
• ✅ Diminishing marginal utility

c. Add up quantities demanded by all individual consumers for each price.