Lower prices tend to affect demand because they tend to increase the interest in a product. This is comprised of the four basic laws of supply and demand.
EXPLANATION:
The four basic laws of supply and demand are:
1. If supply increases while demand remains, it lowers the equilibrium price and raises the quantity.
2. If supply decreases while demand remains, it raises equilibrium price and lowers quantity.
3. If demand increases while supply remains, it raises equilibrium price and raises the quantity.
4. If demand decreases while supply remains, it lowers the equilibrium price and lowers the quantity.
The most fundamental laws in economics are the law of supply and demand. Certainly, nearly every economic event or occurrence is a product of the interaction of the law of supply and demand. The supply’s law asserts that the number of goods supplied rises when the market price rises and falls when the price falls. In contrast, the law of demand says that the number of goods demanded decreases when prices rise and vice versa. One purpose of markets is to seek “equilibrium” costs that balance the supplies of and demands for services and goods. An equilibrium price (so-called “market-clearing” price) is one that each producer can trade all they want to generate and each consumer can purchase all they demand.
LEARN MORE:
If you’re interested in learning more about this topic, we recommend you to also take a look at the following questions:
• Using the supply and demand curve above, which statement is TRUE? brainly.com/question/13137307
KEYWORDS : supply, demand, price, the law of supply and demand
Subject : Social Studies
Class : College
Sub-Chapter : The Law of Supply and Demand
