WHAT DOES PRICE MEANS IN ECONOMICS?
The amount which the consumer is willing to spend to fulfill their desire or wants is known as price. In other words the price is the amount which one sacrifice for getting something in exchange.
Prices are generally expressed in units of some form of currency.
Price is the main factor which drives buyers and sellers.
Price is the main factor which drives buyers and sellers.
WHAT DOES DEMAND MEANS IN ECONOMICS?
On the other hand, Demand means the desire and willingness of the consumer to buy the goods or services at different prices at a given period of time, while other things remaining constant.
SO, HOW PRICE INFLUENCE DEMAND?
The Quantity demanded is the desire and willingness of consumer to buy goods or services and Price is amount that consumer spend to fulfill those desires. So through this we can establish a relationship between price and quantity demanded that they are Inversely Related, that means when Price of any goods or services increases its demand in market decreases and when its Price decreases its demand in the market increases. For Example, in a Perfect market the price of a chocolate is $5 and when its price increases t0 $7 then the demand of the same chocolate decreases and vice verse.
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