Relation of Demand and Price



Relation of demand and price

In Economics, it is very important to understand the relation between demand and price. First of all I would like to tell that there is an inverse relationship between demand and price.  This means that if the price will increase then people will demand less of the product whereas if the price will decease then people will demand more of the product.

Example:

The price of product A was $ 4 and people demanded 10 products now if the price of product A reduces to $ 3 then people will demand 15 products.

The above example clearly shows that as the price of a product decreases it leads to an increase in demand of the same product.






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