ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -As we can see on the demand graph, there is an inverse relationship between price and quantity demanded. 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.

Detailed explanation-2: -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-3: -A demand curve represents the relationship between the price of a good or service and the quantity demanded for a given period of time. Typically, as the price rises, the demand falls; as a result, the curve slopes down from left to right.

Detailed explanation-4: -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-5: -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.