What does the law of demand state?

The law of demand states that, all else being equal, when the price of a good or service decreases, the quantity demanded increases. Conversely, when prices rise, the quantity demanded typically decreases. This relationship between price and quantity demanded reflects consumers' behavior: as goods become more affordable, more consumers are likely to purchase them, leading to an increase in demand.

Option C accurately encapsulates this principle by indicating that lower prices stimulate demand, matching the core idea that price reductions tend to attract more buyers. This fundamental principle is integral to understanding market dynamics and consumer behavior in economics.

In contrast, other options mistakenly suggest that increasing prices lead to higher demand or imply a direct correlation between demand and price that contradicts established economic theory.