Question

According to the law of demand, when will higher corn prices reduce the quantity demanded of corn? A) Always. B) When the supply of the corn is fixed. C) When nonprice determinants, like income and the number of buyers, are held constant. D) When there are no shortages or surpluses of corn.

Answer 1

The law of demand states that when the price of the goods increase (ceteris paribus) the demand of the goods decrease. The term ceteris paribus here mean when the other factors affecting the demand are held constant. The answer is "C",

When the non price determinants, like income and number of buyers are held constant.