[amp_mcq option1=”Varies directly with price” option2=”Varies proportionately with price” option3=”Varies inversely with price” option4=”Is independent of price” correct=”option3″]
The correct answer is: C. Varies inversely with price.
A demand schedule is a table that shows the relationship between the price of a good and the quantity demanded of that good. The law of demand states that, all other things being equal, the quantity demanded of a good will decrease as the price of the good increases. This is because, as the price of a good increases, consumers will have less money to spend on other goods, and they will therefore demand less of the good.
Option A is incorrect because it states that quantity demanded varies directly with price. This is not the case, as quantity demanded actually varies inversely with price.
Option B is incorrect because it states that quantity demanded varies proportionately with price. This is also not the case, as the quantity demanded of a good does not change by the same amount for every change in price.
Option D is incorrect because it states that quantity demanded is independent of price. This is not the case, as quantity demanded is clearly dependent on price.