When prices of products are decreasing , the demand of products will be increased. Moreover, When prices of products are increasing , the demand of products will be decreased.
According to the law of Demand as prices decrease, <u>the demand increases.
</u>
Demand refers to the quantity of goods or services the buyers are willing and able to buy at a particular price.
<h2>Further Explanation
</h2><h3>Demand
</h3>
Demand is the amount of goods or services that consumers are able and willing to buy at a particular market price.
Demand is dependent on the willingness of buyers to buy a good or a service, which is determined by the market price.
At higher prices customers will have little ability to buy goods and services and therefore the demand towards commodities will decrease. However, at low prices the demand will increase as consumers will have the ability to purchase commodities.
<h3> Law of Demand
</h3>
The Law of Demand states that an increase in price of a commodity or service causes a decrease in the quantity demanded by consumers, and a decrease in price would result to an increased demand in goods and services.
<h3>Assumptions of Law of Demand </h3>
The consumer’s income remains constant
Taste and preferences by the buyers are constant
There are no substitutes of goods and services
There are no changes in prices of other commodities
Consumer habits remain unchanged
No quality change in the products
<h3>Demand and price determination
</h3>
The ability and willingness of buyers and sellers to undertake selling and buying determines the market prices.
Buying and selling occurs at an equilibrium price that is agreed upon by sellers and buyers. Therefore, the sellers and buyers are willing to exchange a certain quantity of a commodity at this price. Thus, price depends on the demand and supply in the market.
Keywords: Demand, Law of Demand, consumers
, price
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