ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -If the demand increases, and the supply remains the same, there will be a shortage, and the price will increase. If the demand decreases, and the supply remains the same, there will be a surplus, and the price will go down.

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: -Price is dependent on the interaction between demand and supply components of a market. Demand and supply represent the willingness of consumers and producers to engage in buying and selling. An exchange of a product takes place when buyers and sellers can agree upon a price.

Detailed explanation-5: -Other things that change demand include tastes and preferences, the composition or size of the population, the prices of related goods, and even expectations. A change in any one of the underlying factors that determine what quantity people are willing to buy at a given price will cause a shift in demand.