What we know about Price & Demand?
Price is the main factor which drives buyers and sellers.
Price: A place where two agents (buyer and seller) interact is called MARKET.But the term of interaction is known as PRICE.
In modern economies, prices are generally expressed in units of some form of currency.
Price is the main factor which drives buyers and sellers.
Demand: Demand is a consumer's desire, ability and will to purchase goods at various prices.
Holding all other factors constant, an increase in the price of a good and service will decrease demand and vice verse.
Relation between price & quantity
The Quantity Demanded of any good is the amount of the good that buyers are willing and able to purchase. There is a INVERSE relationship between price and quantity demanded. This can be explained through Law of Demand, i.e, other thing remaining constant, the quantity demanded of a good falls when the price of goods rises. For example, When price of Pen was ₹10, the quantity demanded was 6 pen. But when the price was increased to ₹12 the quantity demanded decreased to 5. Through this we can say there is inverse relationship between price and quantity demanded.
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