When the price of a good decreases, what is the expected impact on demand?

When the price of a good decreases, we generally expect the quantity demanded to increase, aligning with the law of demand in economics. This law states that, all else being equal, consumers will buy more of a good when its price falls. As the price decreases, the good becomes more affordable, prompting consumers to purchase larger quantities.

This relationship reflects a movement along the demand curve rather than a shift in it; the demand curve itself represents the relationship between price and quantity demanded. Therefore, while the quantity demanded increases, the overall demand (referring to the demand curve) remains unchanged unless other factors affect consumer preferences or income.

In this scenario, the correct answer highlights this fundamental principle of economics, illustrating how price decreases generally lead to an increase in the quantity demanded. This behavior underlines consumer responsiveness to price changes, a key concept in macroeconomic theory.