Question

What does a sale on shirts have to do with the law of demand (as applied to shirts)?

Short answer

A sale on shirts relates directly to the law of demand. As prices decrease due to the sale, demand for shirts increases, assuming all other variables remain constant.

Step-by-step solution

Define the Law of Demand

The law of demand is a fundamental concept in economics. It postulates that, assuming all other factors remain constant, as the price of a good or service increases, consumer demand for it decreases, and vice versa.

Apply the law of demand to the sale situation

Let's imagine a situation in which a clothing store reduces the price of shirts during a sale. According to the law of demand, the price reduction should increase the quantity of shirts customers are willing to buy, assuming everything else stays the same.

Finalize the connection

Therefore, a sale on shirts is directly linked to the law of demand. By lowering the prices, the retailer stimulates increased demand among consumers.