Question

Which of the following statements are incorrect about the Law of Demand?

(i) It states the direct relationship between price and quantity demanded.
(ii) It does not establish any proportional relation between change in price and change in demand.
(iii) It is one-sided as it only explains the effect of a change in price on the quantity demanded.
(iv) It makes quantitative statement only.

Alternatives:

Options

• (i) and (ii)

• (ii) and (iii)

• (i) and (iv)

• All of these

Answer 1

(i) and (iv)

Explanation:

The Law of Demand states an inverse not direct relationship between price and quantity demanded, so statement (i) is incorrect. It is qualitative, not quantitative, making statement (iv) incorrect; statements (ii) and (iii) are correct.