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Question
The law of demand in ______ states that when prices fall demand is likely to increase.
Fill in the Blanks
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Solution
The law of demand in economics states that when prices fall demand is likely to increase.
Explanation:
Holding other factors constant (ceteris paribus), a lower price makes a good cheaper relative to income and substitutes, so consumers buy a larger quantity, the combined income and substitution effects drive the increase in quantity demanded.
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