ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -So if the price of pizza increase from $6 to $9 we will get an decrease in quantity demanded ( Qd) from 5 pizzas to 3 pizzas. This does not change the demand schedule or the demand curve. Demand does not change. But it does result in a movement along the SAME demand curve.

Detailed explanation-2: -Because of the Law of Demand-which says that as the price of a good increases, the quantity demanded decreases-we know that as the price of pizza goes up, you’ll buy less pizza, whereas if the price of pizza goes down (or was free!) you’d probably buy (or take) more.

Detailed explanation-3: -A rise or fall in the price of pizza will cause the quantity supplied to change, but not the supply schedule. In other words, a change in a good’s price moves the seller from one row to another in the same supply schedule, but does not require us to create a new supply schedule.

Detailed explanation-4: -An increase in the price of Coke will lead to a decrease in its quantity demanded. When the quantity demanded decreases and there is no substitute for it, the demand for pizza decreases as well.

Detailed explanation-5: -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).