Question

What affect will a drop in price most likely have

Answer 1

Answer:

When the price of a commodity drops there is increase in the demand. Consumers tend to buy more as at low prices more goods are available. But there are chances of the supply to remain the same.

So when the demand increases, supply is also needed to be increased. The value of the goods fall. To maintain equilibrium the demand and supply needs to be balanced when price drops to avoid the situation of decrease in demand.