ECONOMICS
CONSUMERS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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its price goes up
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its prices goes down slowly
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its price does not change
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its price goes down quickly
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Detailed explanation-1: -Increased prices typically result in lower demand, and demand increases generally lead to increased supply. However, the supply of different products responds to demand differently, with some products’ demand being less sensitive to prices than others.
Detailed explanation-2: -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-3: -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. In these circumstances, suppliers tend to produce more to satisfy the demand and take advantage of the margin opportunities.
Detailed explanation-4: -The demand for a good increases or decreases depending on several factors. This includes the product’s price, perceived quality, advertising spend, consumer income, consumer confidence, and changes in taste and fashion.