Questions: What happens when the price of a good or service increases? (4 points) Demand increases. Demand decreases. Quantity demanded increases. Quantity demanded decreases.

The answer is Quantity demanded decreases.

This option is incorrect. According to the law of demand, when the price of a good or service increases, the demand for that good or service generally decreases, not increases.

This option is partially correct but not entirely accurate in the context of the question. The term "demand" refers to the entire demand curve, which shifts due to factors other than price, such as consumer preferences, income, and prices of related goods. A change in the price of the good itself does not shift the demand curve but rather causes a movement along the demand curve.

This option is incorrect. When the price of a good or service increases, consumers are less likely to purchase it, leading to a decrease in the quantity demanded.

This option is correct. According to the law of demand, when the price of a good or service increases, the quantity demanded of that good or service decreases, assuming all other factors remain constant. This is because consumers will either not buy as much of the good or service or will seek substitutes.