To test whether the law of demand holds using calculus, you should: A) take the partial derivative of quantity demanded Q^D with respect to P and conclude that the law of demand holds if this derivative is positive at the market price. B) take the partial derivative of quantity demanded Q^D with respect to P and conclude that the law of demand holds if this derivative is negative at the market price. C) take the derivative of P with respect to quantity demanded Q^D and conclude that the law of demand holds if this derivative is positive at the market price. D) take the derivative of P with respect to quantity demanded Q^D and conclude that the law of demand holds if this derivative is negative at the market price.

Question

Quizplus · Accepted Answer

The law of demand states that there is an inverse relationship between price and quantity demanded, meaning as price increases, quantity demanded decreases, and vice versa. Therefore, the correct approach is to take the partial derivative of quantity demanded with respect to price (P), and the law of demand holds if this derivative is negative, indicating that quantity demanded decreases as price increases.

To Test Whether the Law of Demand Holds Using Calculus