ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The law of demand holds that demand for a product changes inversely to its price, all else being equal. In other words, the higher the price, the lower the level of demand.

Detailed explanation-2: -It’s a fundamental economic principle that when supply exceeds demand for a good or service, prices fall. When demand exceeds supply, prices tend to rise.

Detailed explanation-3: -Demand is generally considered to slope downward: at higher prices, consumers buy less. The point at which the two curves intersect represents the market-clearing price-the price at which demand and supply are the same. Prices can change for many reasons (technology, consumer preference, weather conditions).

Detailed explanation-4: -The law of supply and demand states that when the demand for a good or service is higher than the supply, prices are likely to rise.

Detailed explanation-5: -A shortage exists if the quantity of a good or service demanded exceeds the quantity supplied at the current price; it causes upward pressure on price. An increase in demand, all other things unchanged, will cause the equilibrium price to rise; quantity supplied will increase.