What economic principle explains the relationship between price and demand quantity?

The relationship between price and the quantity demanded is explained by the Law of Demand. This principle states that, all else being equal, as the price of a good or service decreases, the quantity demanded by consumers increases. Conversely, as the price increases, the quantity demanded typically decreases. This inverse relationship is foundational in economics, reflecting consumer behavior; when goods become cheaper, they are often perceived as more accessible, leading to increased purchasing.

Understanding the Law of Demand is critical for analyzing market behavior and consumer choices. It helps explain why demand curves are typically downward sloping, illustrating that price reductions can lead to higher sales volumes. Factors such as consumer preferences, income levels, and the price of substitute goods can also influence demand, but the core principle remains focused on the direct relationship between price and quantity demanded.