According to the law of supply, price and quantity move
a) along a track in the same direction.
b) along a track in opposite directions.
c) from different points toward one another.
d) from the same point away from one another.
Answer:- a) Along a track in the same direction.
The law of demand states that. If all other influences remain equal, the higher the value of a good, the lesser people will demand that good. In simpler words, the higher the price, the lower the quantity demanded. The quantity of a good that purchasers purchase at a higher price is lesser since as the price of a good goes up. Consequently, people will obviously avoid purchasing a product that will force them to overlook the consumption of something else that value more.
2. According to the law of demand, price and quantity move
A) along a track in the same direction.
B) along a track in opposite directions.
C) from different points toward one another.
D) from the same point away from one another.
Answer:- B) along a track in opposite directions.
In the law of demand, there is a reciprocity between quantity demanded and price of goods or services holding everything else constant. As the cost of a commodity or service rises, demand will fall. On the other hand, when price falls, quantity demanded will rise.
On a demand curve with price on the y-axis and quantity demanded along x, this inverse connection can be seen. The demand curve shifts downwards from left to right, indicating the fact that as price falls quantity demanded increases. This negative incline is an indication of the law of demand: higher price, lower quantity demanded.
It is due to a number of reasons that this relationship between price and quantity demanded in inverse. Second- as the price of a good increases, it becomes relatively less attractive compared to close commodities. Consumers will shift to cheaper alternatives. Second, the increase in price eliminates affordability for consumers leading to a reduction of their demand. Third, the relatively high cost of the good makes consumers feel poorer in comparison to their purchasing capacity and thus reduces their aggregate demand for that product.
In brief, the demand law is based on assumption that when price of a commodity fall consumers will purchase more and if it rises they will buy less. This leads to the negative relationship between price and quantity demanded as illustrated by a downward sloping demand curve. It’s crucial to understand the law of demand because it governs consumer behavior and market processes.
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