Which economic term best describes a situation when the quantity demanded rose as the price fell?

The term that best describes a situation where the quantity demanded rises as the price falls is "extension of demand." This concept reflects the fundamental principle of the law of demand in economics, which asserts that, all else being equal, as the price of a good or service decreases, the quantity demanded by consumers increases. This relationship illustrates how consumers tend to purchase more of a product when it is more affordable, thereby demonstrating an extension of demand.

In contrast, the other terms do not capture this particular behavior. A contraction of demand, for instance, would involve a decrease in the quantity demanded as the price increases. Market failure refers to a situation where the allocation of goods and services is not efficient, often resulting from externalities or public goods issues, and is not directly related to price changes and quantity demanded. A supply shift indicates a change in the quantity supplied for a given price, which does not pertain to the relationship between price and quantity demanded. Thus, "extension of demand" is the most accurate description of the observed scenario.