Question

Which best explains how the law of demand affects consumers?

It helps consumers know when prices are going down.
It helps consumers know when prices are going up.
It helps consumers tell producers when prices are too high.
It helps consumers tell producers when to make new goods.

Answer 1

It helps consumers tell producers when to make new goods.

Explanation: The law of demand says lower prices lead to higher quantity demanded (and higher prices lead to lower demand). Consumers’ buying behavior therefore signals producers when to increase or decrease production.