As the price of a good or service increases, consumers will purchase a lower quantity of that good or service due, in part, toto the fact that consumers cannot afford the same quantity of a good or service at a higher price. This concept is known as the _______________________.
This concept is known as the law of demand.
This concept is known as the law of demand.
This concept is known as the "Law of Demand." The Law of Demand states that as the price of a good or service increases, the quantity demanded decreases, assuming that all other factors remain constant.
To understand why this happens, you need to consider the behavior of consumers. When the price of a good or service rises, it becomes more expensive for consumers to purchase the same quantity as before. As a result, they may either choose to buy a smaller quantity or find alternatives that are more affordable.
To calculate the effect of this law, economists use demand curves, which represent the relationship between the price of a product and the quantity demanded at different price levels. By analyzing these demand curves, economists can determine how changes in price will impact consumer behavior.