ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The law of demand states that when the price of a product goes up, the quantity demanded will go down – and vice versa.

Detailed explanation-2: -Economists call this the Law of Demand. If the price goes up, the quantity demanded goes down (but demand itself stays the same). If the price decreases, quantity demanded increases. This is the Law of Demand.

Detailed explanation-3: -If the price of a good falls, the quantity demanded of that good increases. The relationship between the quantity demanded and the price of a good when all other influences on buying plans remain the same. Demand is a list of quantities at different prices and is illustrated by the demand curve.

Detailed explanation-4: -In other words, the higher the price, the lower the level of demand. Because buyers have finite resources, their spending on a given product or commodity is limited as well, so higher prices reduce the quantity demanded. Conversely, demand rises as the product becomes more affordable.

Detailed explanation-5: -1. The decrease in demand causes excess supply to develop at the initial price. a. Excess supply will cause price to fall, and as price falls producers are willing to supply less of the good, thereby decreasing output.