According to the law of demand in microeconomics, how does the quantity demanded of a good change when its price increases, other things remaining equal?

Introduction / Context:
The law of demand is one of the most fundamental principles in microeconomics. It describes the inverse relationship between the price of a good and the quantity demanded by consumers, assuming that all other influencing factors remain constant. Many exam questions test understanding of this definition and require learners to distinguish carefully between the terms demand and quantity demanded. This question focuses on the correct statement of how quantity demanded changes when price increases under ceteris paribus conditions.

Given Data / Assumptions:
• We are dealing with the law of demand in its standard form. • Only the price of the good changes; other factors like income and preferences remain constant. • The question is conceptual and no numerical data is given. • We must choose the correct statement among four alternatives.

Concept / Approach:
The law of demand states that, ceteris paribus, as the price of a good rises, the quantity demanded falls, and as the price falls, the quantity demanded rises. This inverse relationship is due to substitution and income effects. It is important to note that demand refers to the entire relationship between price and quantity demanded, represented by the demand curve, while quantity demanded refers to a specific point on that curve at a given price. Therefore, changes in price cause movement along the demand curve, changing quantity demanded, but not shifting the entire demand curve itself.

Step-by-Step Solution:
Step 1: Recall the core statement of the law of demand. When price increases, quantity demanded decreases, other factors remaining equal. Step 2: Focus on the phrase quantity demanded rather than demand, because a change in price moves us along the same demand curve. Step 3: Among the given options, identify which one correctly uses the term quantity demanded and describes the inverse relationship. Step 4: Option C states that if the price of a good increases, the quantity demanded of that good decreases, which matches the textbook definition. Step 5: Conclude that option C correctly expresses the law of demand in this context.

Verification / Alternative check:
You can think of a simple example with a normal everyday product such as tea. If the price of tea doubles while your income and tastes remain unchanged, you will likely buy less tea or switch partly to substitutes like coffee. This illustrates that as price rises, quantity demanded falls. Graphically, on a standard demand curve with price on the vertical axis and quantity on the horizontal axis, a movement upward along the curve corresponds to a movement leftward to a smaller quantity, confirming the inverse relationship.

Why Other Options Are Wrong:
Option A says that demand decreases when price increases. In standard terminology, demand refers to the whole curve and does not change due to price variation alone. Therefore this wording is imprecise and misleading for exam purposes.
Option B claims that demand increases when price increases, which contradicts the basic law of demand and would only arise in exceptional cases like Giffen goods, which are not the norm.

Option D says that quantity demanded increases when price increases, which is the opposite of the typical behaviour described by the law of demand.

Common Pitfalls:
A common error is to mix up demand with quantity demanded and write that demand rises or falls when price changes. Another pitfall is to be confused by the language if options use the word demand loosely. In competitive exams, the standard expectation is to reserve the word demand for shifts of the demand curve caused by non price factors and to use quantity demanded for movements along the curve due to price changes. Keeping this distinction clear helps select the correct statement quickly.

Final Answer:
According to the law of demand, when the price of a good increases, the quantity demanded of that good decreases, other things remaining equal.