ECONOMICS (CBSE/UGC NET)

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: -Price is not a determinant of demand, thus a change in price does not cause demand to increase or decrease. If the price of new cars changes, ceteris paribus, there will be a change in the quantity demanded and a movement along the demand curve.

Detailed explanation-3: -Buyers look over the products and the bidding begins. Prices are likely to be higher if there are many buyers in the room and lower if there are few. Prices are likely to be higher if there are only a few sellers in the room and lower if there are many.

Detailed explanation-4: -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).