During the winter of 1997-1998, the northeastern United States experie

During the winter of 1997-1998, the northeastern United States experienced warmer than usual conditions. The price of home heating oil was less than it was during the previous winter, but people bought less home heating oil. This contradicts the Law of Demand.

Indicate whether the statement is true or false

ANSWER

False. The statement claiming a contradiction confuses a change in quantity demanded with a change in the demand curve. The law of demand refers to movements along a given demand curve. The mild weather caused a leftward shift of the demand curve.