According to the law of demand, what happens when the price of a good decreases?

The law of demand states that, all else being equal, a decrease in the price of a good leads to an increase in the quantity demanded by consumers. This concept can be understood through the principle that as prices fall, goods become more affordable to a broader range of consumers. Consequently, more people are inclined to purchase the product, resulting in an increase in the quantity demanded.

For instance, if the price of a popular snack food drops, more consumers are likely to buy it, not only because it fits better within their budgets, but also because the lower price may encourage some consumers who previously didn't buy it to now make a purchase.

The other options do not accurately reflect the implications of the law of demand. A decrease in price would not cause the quantity demanded to decrease or lead to increased elasticity of supply directly; rather, it motivates consumers to buy more. Similarly, while a decrease in price could lead to stabilization in prices over time, this is not a direct outcome of the law of demand itself. Thus, the accurate interpretation of the law is that a decrease in the price of a good results in an increase in the quantity demanded.