Table of Contents
- 1 How is the future price related to current demand?
- 2 How is demand for a product related to its price?
- 3 What kind of relationship exists between demand for a good and price of its substitute goods?
- 4 How does ceteris paribus relate to demand?
- 5 Is there a positive relationship between price and quantity as it pertains to the law of demand?
- 6 What conditions price of a good and its demand are positively related?
How is future price related to current demand? If the price is expected to rise, current demand will drop. If the price is expected to fall, current demand will rise. If the price is expected to rise, current demand will rise.
Thus, the price of a product and the quantity demanded for that product have an inverse relationship, as stated in the law of demand. An inverse relationship means that higher prices result in lower quantity demand and lower prices result in higher quantity demand.
What happens to demand for a good when its price goes up?
If the price goes up, the quantity demanded goes down (but demand itself stays the same). If the price decreases, quantity demanded increases. This is the Law of Demand. On a graph, an inverse relationship is represented by a downward sloping line from left to right.
What kind of relationship exists between demand for a good and price of its substitute goods?
The relationship between demand for a good and price of its substitute is direct.
How does ceteris paribus relate to demand?
Economists say the law of demand demonstrates that ceteris paribus, more goods tend to be purchased at lower prices. Or that, if demand for any given product exceeds the product’s supply, ceteris paribus, prices will likely rise.
When consumers expect that future prices will increase it is expected that *?
A market demand schedule is a table used to explain the correlation between the price consumers are willing to pay for something based on the demand for it. Learn about market demand and explore the relationship between demand and price tracked by market demand schedules.
Is there a positive relationship between price and quantity as it pertains to the law of demand?
The law of demand is an economic principle that explains the negative correlation between the price of a good or service and its demand. If all other factors remain the same, when the price of a good or service increases, the quantity of demand decreases, and vice versa.
When the price of a good that complements a good decreases, then the quantity demanded of one increases and the demand for the other increases. When the price of a substitute good decreases, the quantity demanded for that good increases, but the demand for the good that it is being substituted for decreases.
What kind of relationship exists between price of a good and demand of its complementary good * 1 point?
inverse relationship
There exists an ”inverse relationship” between price of the good and demand of its complementary good, i.e, as price of the good rises, demand of its complementary good falls.